Credit conditions will improve next year, economists say

07.06.09
By Timothy Jones

Have you seen your credit score decrease over the past year? Or maybe you were denied a home loan or had your credit limit cut?

It's no secret that consumers across America have faced tough credit conditions over the past several months, but the question that many analysts are trying to answer right now is: when will the borrowing climate improve?

A new report from research publisher BNA found that most economists believe the U.S. economy will turn around in the second half of this year and begin a gradual recovery in 2010.

Recently, consumers and businesses alike have noted some positive economic signs emerging that suggest the end of the recession could be near.

However, any optimistic feelings about these green shoots have been largely tempered by other financial indicators - such as still-rising unemployment numbers. The U.S. jobless rate is currently at 9.5 percent and could increase to 9.9 percent in the coming months.

Meanwhile, there are few signs that cash-strapped Americans are making much progress on paying down credit card debt - although there is ample evidence that people have cut back on further spending.

According to economists polled by BNA, credit conditions are likely to improve next year, while the currently imbalanced housing market will slowly correct itself.

Twenty of the experts questioned said they believe the country's GDP will turn positive this summer, while two said there will be no growth and one foresees decline continuing into the fourth quarter.

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Consumers across America have faced tough credit conditions.