The U.S. economy could see "above-trend" growth in 2010, according to the latest forecast from the National Association for Business Economics.
The forecast calls for a 5% contraction in gross domestic product in the first quarter of 2009, followed by another 1.7% drop, resulting in a 0.9% growth rate for the year as a whole.
"The good news is that economic activity is expected to turn up in the second half of the year and 2010 is expected to see modestly above-trend growth of 3.1%," said NABE president Chris Varvares, who is also president of Macroeconomic Advisers.
However, despite the forecast for the U.S. recession to end in the second half of 2009, the year will still be a challenging one, with NABE forecasting a rise in unemployment to 9%.
"The steady drumbeat of weak economic and financial market data has made business economists decidedly more pessimistic on the economic outlook for the next several quarters," Varvares added.
The main driver will be reduced consumer spending, which is being reined in due to tight credit conditions, declines in equity markets and home values, and a rise in job losses.
"Cumulatively, the cyclical downturn will rival that of 1973-75," the report notes.
The forecast also sees real government spending advancing by a robust 2.8% in 2009, while the consumer price index is projected to decline 0.8% in the year.
By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2009