Submitted by Natalie Ransom
The economic recession will end during the third quarter of this year, but high unemployment and large federal deficits will continue, according to the Economic Advisory Committee of the American Bankers Association.
The committee cited consumer spending stabilizing in the first half of this year, allowing businesses to reduce costs and inventories, as well as reducing layoffs and investment spending cutbacks. In combination with the stimulus and an improvement in the financial markets, it is likely the economy will expand in the second half of the year.
Bruce Kasman, committee chairman and chief economist for New York-based JPMorgan Chase & Co. (NYSE: JPM), said the economy will return to growth, but not health.
“Growth in the coming quarters is likely to gather momentum but will not prove sufficiently robust to undo much of the severe damage done to our labor markets and public finances,” Kasman said in a news release.
For the third quarter, the committee forecasts inflation-adjusted gross domestic product will return to positive growth, picking up to a more than 3 percent pace by the second half of 2010.
For the entire story from the Atlanta Business Chronicle, please click here.