A group of bank economists sees the recession ending during the third quarter of 2009, but high unemployment and large federal deficits will keep the economy in a funk for some time to come.
The June 16 report by the Economic Advisory Committee of the American Bankers Assn. echoes a number of recent outlooks by economists who forecast the recession ending this year followed by a slow turnaround.
The June 16 report by the Economic Advisory Committee of the American Bankers Assn. echoes a number of recent outlooks by economists who forecast the recession ending this year followed by a slow turnaround.
«The economy will return to growth but not to health,» said Bruce Kasman, committee chairman and chief economist for JPMorgan Chase (JPM), in a statement released by the group. «Growth in the coming quarters is likely to gather momentum but will not prove sufficiently robust to undo much of the severe damage done to our labor markets and public finances,» he said.
The group’s report comes amid some new economic reports that show small improvements in the economic outlook. New home construction jumped 17.2% to a seasonally adjusted annual rate of 532,000 units, from April’s record low of 454,000 units, the Commerce Dept. said Tuesday. Building permits, an indicator of future activity, rose 4% to an annual rate of 518,000 units, also better than expected. The gains in construction were driven by a surge in the highly volatile category of multifamily buildings, which soared 61.7% in May after plunging 49.4% in April. Single-family home construction rose at a much lower rate, 7.5%.
The group’s report comes amid some new economic reports that show small improvements in the economic outlook. New home construction jumped 17.2% to a seasonally adjusted annual rate of 532,000 units, from April’s record low of 454,000 units, the Commerce Dept. said Tuesday. Building permits, an indicator of future activity, rose 4% to an annual rate of 518,000 units, also better than expected. The gains in construction were driven by a surge in the highly volatile category of multifamily buildings, which soared 61.7% in May after plunging 49.4% in April. Single-family home construction rose at a much lower rate, 7.5%.
Meanwhile, the Producer Price Index, which measures wholesale prices, rose by a seasonally adjusted 0.2% from April, the Labor Dept. said. That was below analysts’ expectations of a 0.6% rise.