Economists See a Rebound in September - Democratic Underground

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Thu Apr-09-09 09:46 PM
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Economists See a Rebound in September

Edited on Thu Apr-09-09 10:31 PM by Pirate Smile

Source: The Wall Street Journal

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%.

"The end of the decline isn't the beginning of the recovery," said David Resler of Nomura Securities Inc. "It's like a boxing match. Even if you win the fight, it's not going to feel as good when you get out of the ring as when you went in."

Indeed, economists' prospects for the labor market remain bleak. Just 12% of the economists expect the unemployment rate to fall some time this year. More than a third of respondents expect the jobless rate to peak in the first half of 2010, while about half don't see unemployment declining until the second half of 2010. By December of this year, the economists on average expect the unemployment rate to reach 9.5%, up from the 8.5% reported for March. They do see the rate of decline slowing, forecasting 2.6 million job losses in the next 12 months, compared with the 4.8 million jobs lost in the previous period.

Washington Post article:

Signs of Revival In Retail, Banks
Recession May Be Loosening Its Grip, But Some See Worst Ahead for Workers

By Annys Shin and Renae Merle
Washington Post Staff Writers
Friday, April 10, 2009; Page A01

The ailing financial and retail sectors showed tentative signs of strength yesterday, an encouraging shift for an economy whose prospects are tied to their recovery.
A resurgence among consumers and banks is a necessary precursor to a turnaround in an economy that has been battered on nearly every front -- housing, exports, employment -- in recent months. New data yesterday offered at least some hope that the darkest days of the recession could be ending, even if the economy remains fragile.

-snip-
Financial markets surged on the news, partly because they have been braced for a dismal first-quarter earnings season. The Dow Jones industrial average jumped 3.14 percent to land at 8083. The Standard & Poor's 500-share index and the tech-heavy Nasdaq were up nearly 4 percent after steep losses earlier in the week.
For the fifth week in a row, stocks have ended in positive territory. In the month since the market reached a low in March, stocks have climbed more than 20 percent.

The recession remains severe, and economists stress the worst for U.S. workers is still to come. Americans are still claiming jobless benefits at record levels, with the number of people receiving unemployment insurance now approaching 6 million. The unemployment rate in March was 8.5 percent, and earlier this week, Federal Reserve Bank of Dallas chief Richard W. Fisher said he thought it could surpass 10 percent by year's end.

-snip-
The decline in sales have been stabilizing, though, in part because lower energy costs have left people with more money to spend. Some retailers yesterday reported better-than-expected results and sounded more positive about the future than they have in months. Wholesale clubs such as Costco and BJ's turned in particularly strong results, with sales rising 4.6 percent in March excluding the impact of fuel. Even sales at those firms that missed analyst expectations could have ICSC chief economist Michael P. Niemira said.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/09/AR2009040901727.html?hpid%3Dtopnews&sub=AR