Monday, February 23, 2009

Recession Could End By Year's End


In the most optimistic prediction of the resolution of the economic crisis to date, the National Association for Business Economics says the recession will end in the second half of 2009 and there will be substantial growth in the economy next year.

The NABE cautions, however, that meaningful recovery won't be evident until next year. Still, that's a much better outlook than any other that's being offered.

Things will, however, get worse, says the NABE, before they get better.

"Further pronounced weakening in housing and deteriorating labor markets underscore the risks for 2009,” said NABE President Chris Varvares.

Varvares, president of Macroeconomic Advisers says that it's expected that there will be a sharp, 5 percent contraction in the economy the first quarter of 2009. Followed by a decline of a 1.7 percent in the second quarter. But Varvares says NABE forecasters expect real GDP to rise at a sub-par 1.6% rate in the second half.

He says this leaves a decline of .9 percent overall in 2009, on the heels of a .2% decline in 2008.

Although the unemployment rate is forecast to rise to 9 percent by year-end, "the good news," Varvares says, 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.”

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Anonymous said...

I shake my head as I hear this reported this morning on my local news. Not ONE economist saw this current meltdown coming. They should all be fired, to think any economic "analyst" is credible now is ridiculous.

Deborah Young

Anonymous said...

Wow. One can only hope.

Anonymous said...


there were a great deal of people who saw something like this coming. I remember noting how it seemed rather ridiculous to me how much people were putting on credit and variable rate mortgages in 2004. Everyone I talked to told me not to worry and that it was good so many people were homes. I'm not as a smart as an economist, which make me think that there were definitely some who did see this coming. Because all the free market sycophants felt that these people were raining on their parade, they told them to shut up and look at how great everything was. Shows you the importance of dissent.

Aaron Rury

Anonymous said...

The world's financial infrastructure is crumbling.

This is going to be a long, long ride. We may be able to see the bottom a year from now, but I cannot imagine a scenario in which things will be all recovering and peachy in fewer than 3 years.

Anonymous said...

Thanks, Gary. It's going to be over when it's over, but I'm sending this to my mother so she stops calling me every day, reminding me how awful everything is.

Lisa Kern

Anonymous said...

Actually, a couple of economists such as Peter Schiff did see it coming. They were mostly laughed off the airwaves and editorial pages by those who stood to gain by throwing gasoline on the fire. Funny, the same idiots who mocked him are now saying THEY predicted it.