U.S. recession to end in H2 but unemployment to rise: survey

[ProSense]

U.S. recession to end in H2 but unemployment to rise: survey

Fri Apr 10

WASHINGTON (Reuters) – The U.S. economy is set to emerge from recession in the second half of this year as consumer spending and the housing sector recover, but unemployment will rise well into 2010, according to a survey.

The Blue Chip Economic Indicators survey of private economists released on Friday showed that 86 percent of respondents believed that the economic downturn would be declared to have ended in the second half.

"Real GDP contracted very sharply during the first quarter of this year and will continue to shrink, albeit more slowly in the second quarter before turning very modestly higher in the third and fourth quarters," the survey said.

Much of the anticipated turnaround in the economy, now in its 16th month of recession, would be driven by some improvement in consumer spending, housing, business inventories and exports. Yet, above-trend growth was not expected until the second half of 2010.

Gross domestic product plunged at a 6.3 percent annualized rate in the fourth quarter of 2008, the steepest quarterly decline since 1982. The economic downturn will next month become the longest U.S. recession since the Great Depression.

However, recent economic data have suggested that the pace of deterioration might be slowing.

more

APRIL 9, 2009

Economists See a Rebound in September

By PHIL IZZO

Economists in the latest Wall Street Journal forecasting survey expect the recession to end in September, though most say it won't be until the second half of 2010 that the economy recovers enough to bring down unemployment.

Gross domestic product was predicted to contract in the first and second quarters of this year by 5.0% and 1.8%, respectively, on a seasonally adjusted annualized rate. A return to growth -- a modest 0.4% -- isn't expected until the third quarter. In the fourth quarter of 2008, the most recent period for which data are available, the economy contracted 6.3%.

<...>

Several factors are raising hopes, chief among them businesses' sharp cuts in production and inventory late last year. The economy may be reaching a point where even meeting subsistence demand requires an increase in output. Empty shelves need to be restocked, even if at lower levels than before.

The economy also is set to get the benefits of monetary and fiscal policy, as the stimulus begins to hit and Treasury and Federal Reserve programs to prop up the financial sector ramp up. Nine out of 10 economists surveyed expect help from the Term Asset-Backed Securities Loan Facility, which is aimed at boosting consumer and small-business loans. Meanwhile, 72% of respondents say the Treasury's plan to purchase toxic assets will help the economy.



more

[MissMarple]

1. The head of one of our large trucking firms said on Air America when the trucks start moving...

we will have turned a corner in the recession. It is basically the same as what the economists are saying. It is too bad so many of our goods are no longer made in America. I understand Pendleton still makes its own cloth. I hope the clothes are still manufactured here. I'm going to check out their store in Fort Collins for a few necessary spring items.

Does 16 months of recession make it a depression? If it walks like a duck and quacks like a duck....

[Vanje]

2. I was stunned

I recently bought a stury bag, to carry all that stuff I drag around with me.
Good quality. It'll last forever. Not expensive.

I was stunned to read "Made in Chico, California" on the tag.
http://www.overlandequipment.com/


Pendleton woolens are wonderful.
http://www.pendleton-usa.com/jump.jsp?itemID=971&itemType=CATEGORY&path=1%2C2%2C661%2C971%2C0&KickerID=4&KICKER
Their thick beautiful blankets make the best wedding presents. They're real heirlooms.

[paulk]

4. another indicator to follow is rail traffic

http://www.ble.org/pr/news/headline.asp?id=25737

[depakid]

5. When that happens, watch petroleum rise again toward $200 per barrel

http://business.smh.com.au/business/enjoy-the-cheap-petrol-while-it-lasts-20090409-a26l.html

[Kdillard]

3. Pretty much in line with my expectations .

[jeanpalmer]

6. Jobs (new hirings) is a lagging indicator

because companies generally put off hiring until the crisis has passed. But jobs (initial claims for unemployment)is a leading indicator. Meaning that more people filing for unemployment is an indicator that economy is still heading down. Many economists use a 4-week moving average of initial claims to smooth out the weekly ups and downs. And that is the statistic that is used in the official Leading Economic Indicators. That 4-week average has been holding steady at 650,000, a very high number. So jobs (initial claims), the leading indicator, is predicting continued economic weakness with no signs of recovery.

The optimists are saying we've turned the corner, recovery is on its way. The problem they have are the negative job numbers, both initial claims and monthly job losses. They ignore initial claims, because they can't rationalize them away. But with respect to high job losses, they push this argument: since job losses is a lagging indicator, it is not a negative for predicting a recovery; but since it is not a negative, it's a positive. Totally whacky reasoning. They're grasping at straws. But this faulty logic has gained a lot of traction, especially on CNBC and talk shows.

[Kat45]

7. I don't think we ever came back from that last "jobless recovery"

And we absolutely NEED jobs to have any sort of recovery now.