Economists forecast modest rebound to start in the fall

A panel of 45 U.S. economists said May 27 it expects a "modest" economic rebound to begin in the second half of 2009, picking up steam in 2010, according to the National Association for Business Economics.

The economists predicted “positive, albeit modest, growth in the third quarter, followed by steady improvement thereafter," the NABE outlook report said. "On the whole, however, the economic rebound lacks luster. Real GDP growth over the second half of 2009 is expected to average a well-below-trend 1.2 percent pace."

The "NABE Outlook" report presents a consensus of macroeconomic expectations from a panel of 45 professional forecasters. The survey was taken Apr. 27-May 11. The forecasters surveyed said growth in 2010 "is slated for a return to near its historical trend, with real GDP rising 2.7 percent on a fourth-quarter-to-fourth quarter basis. ... [But] next year's expected growth in GDP would be considerably more moderate than the typical rebound following a steep decline."

The economists said that labor conditions nationwide "are expected to deteriorate further, with additional, but decreasing job losses through year-end." They predicted that the nation would have lost 4.5 million jobs by the end of 2009, driving the unemployment rate to 9.8 percent, but that the rate should ease to 9.3 percent by the end of 2010.

Meanwhile, the Hawaii Department of Business, Economic Development and Tourism said it expects the recession to continue to affect Hawaii throughout 2009. The department said in its latest quarterly economic report released Wednesday that it expects 1.6 percent decline in the state’s 2009 gross domestic product and a 2.1 percent decline in the average job count for the year.

“National and international economic conditions continue to negatively affect Hawaii’s economy and this will likely be the case for most of 2009,” said DBEDT Director Ted Liu, in a statement. “We are hopeful the situation will improve late this year, but recovery is likely to be a gradual process. We expect that the American Recovery and Reinvestment Act of 2009 will also have a positive impact beginning in the latter half of the year and will allow the state to make investments in some transformational changes, especially in the area of energy.”