Is economic recovery in sight?

05.27.09
By Sarah Beldo

For the past several months, American families have had a lot to deal with – an uncertain housing market, a wobbly stock market and waves of layoffs.
 
It is no wonder that so many people have been trying to pay off credit card debt, boost their savings and cut back on spending.
 
Now, a new survey of top economists predicts the economic downturn will finally abate during the second half of 2009.
 
According to the National Association for Business Economics, the U.S. economy will stabilize later this year, but recovery will be "considerably more moderate than those typically experienced following steep declines."

What factors are holding the country back? NABE cites continued job losses, tight credit conditions and falling home values as reasons that a full recovery will probably not be seen until next year.

"The good news is that the NABE panel expects economic growth to turn positive in the second half of this year, with the pace of job losses narrowing sharply over the remainder of this year and employment turning up in early 2010," said NABE president Chris Varvares.

Meanwhile, American consumer sentiment is also showing positive signs. The Conference Board Consumer Confidence Index for May reached its highest level in eight months.

The index rose from 40.8 in April to 54.9 in May, with respondents' expectations for the future jumping to 72.3 from 51 the month before.

Although U.S. consumer confidence is still low by historical standards, "the worst in now behind us," said Lynn Franco of the Conference Board Consumer Research Center.

"Expectations are that business conditions, the labor market and incomes will improve in the coming months," Franco added.
 

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Economists predicts the economic downturn will finally abate during the second half of 2009.