Recession to End This Quarter?

Most economists and economic forecasters believe the economy will exit the recession this quarter (July – September, 2009). However, many caution that this may be a lackluster recovery.

A survey of 51 economists by Blue Chip Economic Indicators indicates that two-thirds of economists predict a U-Shaped recovery, meaning that while the economy will no longer be shrinking, economic growth will be marginal, if at all. One-sixth of the economists predict a V-shaped recovery (typical after a long, deep recession) with robust growth, and the other one-sixth of economist predict a W-shaped recovery meaning another period of retraction after some growth for the last six months of 2009.

The majority of economists predict that consumer spending will remain low with very low inflation with the Consumer Price Index expected to be up 1.9% for 2010. Unemployment will continue to be a problem through 2010, with many predicting an average unemployment rate of 9.9% for 2010.

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