South Florida Business Journal reports, according to the National Association of Business Economists (NABE) that “The great recession is over.”

The proclamation is based on a survey of professional forecasters, who also caution that the recovery will take place slowly as large increases in federal debt and unemployment rates are expected to remain very high through next year.

The NABE is conducting its annual meeting this week in St. Louis.

“Following a sharp 6.4 percent (annual rate) contraction in the first quarter of this year and another 0.7 percent drop in the second quarter, NABE forecasters expect real GDP to rise at an above trend 2.9 percent rate in the second half,” NABE President-Elect Lynn Reaser noted in a statement.

The association said the three-year downturn in the housing market appears close to coming to an end, with growth expected next year.

While the unemployment rate is forecast to rise to 10 percent in the first quarter, it is expected to slip to 9.5 percent by the end of 2010.

“The good news is that this deep and long recession appears to be over and, with improving credit markets, the U.S. economy can return to solid growth next year without worry about rising inflation,” Reaser noted.

Among other findings:

  • Sales of light vehicles are expected to remain weak, with projected sales of 12 million next year.
  • The housing recovery will gather momentum, with housing starts up 38 percent and residential investment up 8 percent.
  • Business investment will contribute to the economic rebound.
  • The dollar will soften further this year and remain weak into the new year.
  • The NABE panel expects a modest deterioration in the trade balance next year.
  • About 21 percent of the panelists believe that the financial markets will improve to the point that they no longer hinder economic growth at some point in the second half of 2009. Another 21 percent expect this will occur in the first half of 2010.
  • Fewer than 8 percent of the panelists expect lost jobs will be regained before 2012.

South Florida Business Journal