You are here
WASHINGTON -- While the U.S. economy is set to contract sharply in the first quarter, the recession-hit economy could begin to recover in the second half of 2009, returning to a potential growth trend in 2010, according to a survey of 47 professional forecasters released by the National Association of Business Economists (NABE) and cited by Reuters.
The potential recovery was seen as being driven by the proposed economic stimulus plan, the group said. The survey forecast the economy expanding at a rate of 3.1 percent in 2010.
"The steady drumbeat of weak economic and financial market data have made business economists decidedly more pessimistic on the economic outlook for the next several quarters," NABE President Chris Varvares told Reuters. "The good news is that economic activity is expected to turn up in the second half of the year and 2010 is expected to see modestly above-trend growth of 3.1 percent."
The survey, conducted between Jan. 29, and Feb. 12, forecast real gross domestic product (GDP) would shrink by an annualized rate of 5 percent in the first quarter, moderating to a 1.7 percent contraction in the second quarter, according to the report.
The economy was then expected to expand by 1 percent in the third quarter, with growth quickening to 2.1 percent in the final three months of the year, the poll respondents said in the survey.
In November, a NABE survey showed forecasted first-quarter GDP sliding at an annual rate of 1.3 percent before rising by 0.5 percent in the second quarter, Reuters reported.
"Cumulatively, the cyclical downturn will rival that of 1973-75. In the current downturn, real GDP is predicted to decline 2.8 percent -- slightly less than the 3.1 percent during the early '70s," the NABE said.
The survey also forecast the unemployment rate peaking at 9 percent in the fourth quarter of 2009, before edging lower in the second quarter of 2010. The U.S. jobless rate is currently at a 16-year high of 7.6 percent, according to the report.
"Job losses are expected to persist through 2009, though steadily diminishing over the course of the year. Average monthly payroll losses of 421,000 through the first half of the year will taper to 114,000 during the second half," the NABE said.
The slump in consumer demand was expected to suppress inflation pressures and the consumer price index was forecast to fall 0.8 percent in 2009 before rebounding to 1.9 percent in 2010, the report stated.