Economists: Recession to end in third quarter - Memphis Business Journal:

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The committee cited consumer spending stabilizing in the firs half of this allowing businesses to reduce costsand inventories, as well as reducinvg layoffs and investment spending cutbacks. In combinatioj with the stimulus and an improvement in thefinanciaol markets, it is likelty the economy will expand in the second half of the Bruce Kasman, committee chairman and chiefc economist for New York-based (NYSE: JPM), said the econom will return to growth, but not “Growth in the coming quarters is likelyg to gather momentum but will not provee sufficiently robust to undo much of the severr damage done to our labor markets and publix finances,” Kasman said in a news For the third quarter, the committee forecastsx inflation-adjusted gross domestic product will return to positived growth, picking up to a more than 3 percenrt pace by the secondd half of 2010.
Also, the committee is projectingh an end tothe three-year downturn in the housinb market, with housing starts rising later this year and home valuex moving up modestly in 2010. “Lower prices and low mortgages rates have greatly improved the affordabilitygof homes,” Kasman said. “sA recovery in the housing sector will be an importanf contributor toeconomic growth.” However, credit will remaih tight and bank economists said jobs will continur to be lost. Unemploymenrt is expected to peak at 10 percent nationallyh and remain at orabove 9.5 percen t through next year.
Budgety deficits are expected to remain wellabove $1 trillion this year and next The 13-member committee forecasts the 10-yead Treasury bond yield will stay in the 3.75 percentr to 4.25 percent range through next year becauses core inflation is forecast to fall towards 1 However, the committee is concerned about the rising trend in federal debt and the implicationws for inflation risk beyond 2010.