Economists Predict Subdued Recovery, Growth in '10

Washington, DC, Aug. 10, 2009--Economic forecasters say the recession will end this quarter, but most also believe a U.S. recovery will be subdued, according to the monthly survey of economists by Blue Chip Economic Indicators.

The panel of 51 economists predicts that the economy will contract 2.6% in 2009 and that gross domestic product will grow 2.3% in 2010, according to the median forecast.

About one-sixth of the group believes the recovery will be robust, resembling a V-shape on chart, as it typically does after a deep recession. Another one-sixth believes the recovery will look like a W, with a further period of weakness next year after a period of strength over the final six months of 2009.

The others -- about two-thirds of the group -- expect a U-shaped recovery, with below-trend growth until late next year.

Consumer spending is likely to be weak through 2010, the economists said.

Most of the forecasters look for subdued inflation and stubbornly high unemployment through the end of 2010.

Specifically, the consumer price index is expected to rise 1.9% next year.

And the nation's unemployment rate should average 9.9% next year, they said. The jobless rate stood at 9.4% during July, government data reported last Friday showed. See full story.