Economists see end of US recession in 09

More than 90 per cent of economists predict the US recession will end this year,although the recovery is likely to be bumpy. That assessment came from leading forecasters in a survey by the National Association for Business Economics to be released Wednesday. It is generally in line with the outlook from Federal Reserve Chairman Ben Bernanke and his colleagues. About 74 per cent of the forecasters expect the recession which started in December 2007 and is the longest since World War II to end in the third quarter. Another 19 per cent predict the turning point will come in the final three months of this year,and the remaining 7 per cent believe the recession will end in the first quarter of 2010. While the overall tone remains soft,there are emerging signs that the economy is stabilizing, said NABE president Chris Varvares,head of Macroeconomic Advisers. The economic recovery is likely to be considerably more moderate than those typically experienced following steep declines.

One of the major forces that plunged the economy into a recession was the financial crisis that struck with force last fall and was the worst since the 1930s. Economists say recoveries after financial crises tend to be slower. Against that backdrop,unemployment will climb this year even if the economy is rebounding,the NABE forecasters predict. Companies wont be in a rush to hire until they feel certain any recovery is firmly rooted.

For all of this year,the forecasters said the unemployment rate should average 9.1 per cent,a big jump from 5.8 per cent last year and up from its current quarter-century peak of 8.9 per cent. If NABE forecasters are right,it would be the highest since a 9.6 per cent rate in 1983,when the country was struggling to recover from a severe recession.