ShareThisAn overwhelming majority of a panel of economists from across the country say the severe recession that started almost two years ago has come to an end.
Four out of five members of a panel from the National Association for Business Economics this week said the economy has been growing since July and that the last two quarters of 2009 will indicate growth.
By its most common definition, a recession is two consecutive quarters of declining growth, based on the gross domestic product.
These economists, most of whom work for colleges, banks and other corporations, tempered the good news with predictions that the rebound from the recession will be slow and muted, unlike the sharp upward curve usually seen at the end of steep declines.
The definitive word on whether the country is in recession comes from the National Bureau of Economic Research, a nonprofit research group based in Cambridge, Mass., New York City and Stanford, Calif. Sixteen one-time winners of the Nobel Prize for economics have been research fellows of this group.
Meeting in St. Louis, the NABE announced that a majority of its panel of 44 economists believe the gross domestic product will expand 2.9 percent over the second half of this year and at a 3 percent pace in 2010. The U.S. economy contracted 6.4 percent in the first quarter of this year and another 0.7 percent in the second, making it the worst decline since World War II.
The economists believe job growth will start to return in 2010, albeit slowly. Consumer spending will be muted as cautious shoppers keep a tighter rein on their discretionary funds. This will hinder a quick expansion of the job markets.
The panel also said the housing market will "deliver robust growth, albeit from a depressed level."
Esmael Adibi, chief economist at Chapman University in Orange, Calif. and a part of this panel, cautioned that the conclusions are a national consensus. Housing situations are essentially local, Adibi said.
Adibi said he does not think upper-end neighborhoods, such as some in his own Orange County, have hit their bottoms. Would-be buyers in the high-end markets have taken a beating from the economy in the past few years.
"But ... I think housing is closer to leveling off in the lower end of the market," Adibi said.
Mark Schniepp, principal of Goleta-based California Economic Forecast, said he's a little more optimistic about the pace of recovery than the NABE consensus.
Schniepp said he's been encouraged that foreclosed homes in southern California have been moving. Every distressed property that sells propels the area closer to normal economic activity, he said.
"Normal, conventional home buying has been subdued by the job market," Schniepp said. "Nevertheless, we think you'll see much more traditional housing activity next spring."
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
Must credit The Press-Enterprise of Riverside, Calif.
