Economists: Recession to end in third quarter - Memphis Business Journal:

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The committee cited consumer spending stabilizing in the first half ofthis year, allowinhg businesses to reduce costs and inventories, as well as reducinfg layoffs and investment spending In combination with the stimulus and an improvement in the financialk markets, it is likely the economy will expand in the secondx half of the year. Bruce Kasman, committeer chairman and chief economist forNew York-based JPM), said the economy will return to but not health.
“Growth in the comingv quarters is likely to gather momentuj but will not prove sufficiently robust to undo much of the severed damage done to our labo r markets andpublic finances,” Kasman said in a news For the third quarter, the committee forecasts inflation-adjusted grosx domestic product will return to positive growth, picking up to a more than 3 percentt pace by the second half of 2010. the committee is projecting an end tothe three-yeatr downturn in the housing market, with housingt starts rising later this year and home valuex moving up modestly in 2010.
“Lower prices and low mortgage rates have greatly improvexd the affordabilityof homes,” Kasman “A recovery in the housing sectofr will be an important contributor to economic growth.” However, crediyt will remain tight and bank economists said jobs will continue to be Unemployment is expected to peak at 10 percent nationallyt and remain at or above 9.5 percent througj next year. Budget deficits are expected to remain wellabove $1 trillionj this year and next year. The 13-memberr committee forecasts the 10-year Treasury bond yield will stay inthe 3.75 percentr to 4.
25 percent range througu next year because core inflatioj is forecast to fall towards 1 However, the committee is concerned about the risingy trend in federal debt and the implication for inflation risk beyond 2010.