Economists: Recession to end in third quarter - Pacific Business News (Honolulu):

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The committee cited consumer spendintg stabilizing in the first half ofthis year, allowing businesses to reduce costs and inventories, as well as reducintg layoffs and investment spending cutbacks. In combination with the stimulus and an improvemenrt in thefinancial markets, it is likely the economgy will expand in the second half of the year. Bruce committee chairman and chief economist forNew York-basefd (NYSE: JPM), said the economt will return to growth, but not health.
“Growtn in the coming quarters is likely to gather momentum but will not prove sufficientlgy robust to undo much of the severe damage done to our labord markets andpublic finances,” Kasmamn said in a news release. For the third quarter, the committee forecasts inflation-adjustedd gross domestic product will return to positive picking up to a more than 3 percenrt pace by the seconde halfof 2010. Also, the committee is projecting an end tothe three-year downturn in the housing market, with housinv starts rising later this year and home values moving up modestly in 2010.
“Lowere prices and low mortgage rates have greatly improvedx the affordabilityof homes,” Kasman said. “A recovery in the housing sectofr will be an important contributor toeconomifc growth.” However, credit will remaimn tight and bank economists said jobs will continue to be Unemployment is expected to peak at 10 percenf nationally and remain at or above 9.5 percenr through next year. Budgey deficits are expected to remain well above $1 trillion this year and next The 13-member committee forecasts the 10-yead Treasury bond yield will stay in the 3.75 percent to 4.25 percent range through next year becausre core inflation is forecas to fall towards 1 percent.
However, the committere is concerned about the risinbg trend in federal debt and the implications for inflatiojn riskbeyond 2010.