Survey concludes end for worst recession for U.S.
Latest survey conducted by the National Association for Business Economics, which was released on Monday, explains that over 80% of economists hold a viewpoint that recession has ended and expansion has commenced.
However, they feel that the recovery will be gradual as worries over unemployment and high federal debt linger on.
NABE President-elect Lynn Reaser, chief economist at Point Loma Nazarene University stated, "The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines."
Though, the economic outlook for the next few quarters was upgraded by the forecasters, they did warn that unemployment rates and the federal deficit might stay high through the next year.
Presently, the forecasters forecast the economy, as measured by gross domestic product, to hike at a 2.9 percent pace in the second half of the year. The prediction comes after it plunged for four straight quarters for the first time on records dating to 1947. Forecasters hope to see a 3% gain in 2010.
In spite of this, the federal deficit has expanded and the jobless rate might lag behind since employers remain watchful.
In September, the unemployment rate hiked to 9.8 percent from 9.7 percent, which Labor Department explained as the highest point in 26 years, earlier this month.
As per the forecasters, the unemployment rate will continue to rise to 10% in the Q1 of the next year, before touching down to 9.5 percent by the end of 2010.
The year will keep on witnessing worries due to unemployment, which will effect household spending. The Q2 experienced hike in personal consumption spending; however it might remain low in 2010.
In spite of this, Americans might not be able to save as much as they have in past decades. The predictions claim that the savings rate will be above the 2 percent average of the past four years, but below the 9 percent average in the 1970s and 1980s.
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