May 26, 2009

The National Association for Business Economics reports in its latest survey that its panel of business economists expects the recession will end soon, but that the economic recovery will be "considerably more moderate" than those typically experienced after steep declines.
 
And despite "encouraging signs seen in the last several weeks," the NABE panel said downside risks for the next several quarters remain - and include large job losses, no improvement in credit conditions, and sharp declines in home values. As a result, consumers remain cautious.
 
Forecasts from the survey:

• Real GDP forecast to rise at a 1.2% rate in the second half of 2009, resulting in a 1.2% decline at year-end.
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Based on first quarter results of public distributors and anecdotal evidence more recently, we are in the bottom of the trough in the North American industrial economy. The optimism of a month ago that there was some traction for a turnaround has backed off. Consumer confidence has not been solid enough to trigger production levels again. I'm not expecting Q2 to show a lot of improvement.
That said, the past week has delivered more evidence on the consumer side that confidence is turning around. The Conference ...