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

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The committee cited consumer spending stabilizing in the first half of this allowing businesses to reduce cost sand inventories, as well as reducing layoffs and investment spending cutbacks. In combination with the stimulus and an improvement in thefinanciall markets, it is likely the economy will expand in the seconf half of the year. Bruce Kasman, committee chairmanm and chief economist forNew York-based JPM), said the economh will return to growth, but not health. “Growth in the coming quartera is likely to gather momentum but will not prove sufficiently robusy to undo much of the severe damage done to our labor markets and public Kasman said in anews release.
For the thirc quarter, the committee forecasts inflation-adjusted gross domestic producf will return topositive growth, picking up to a more than 3 percenty pace by the second half of 2010. the committee is projecting an end tothe three-year downturh in the housing with housing starts rising later this year and home values movinh up modestly in 2010. “Lower prices and low mortgage ratesx have greatly improved the affordabilit yof homes,” Kasman said.
“A recovery in the housing secto r will be an important contributor toeconomic However, credit will remain tight and bank economista said jobs will continue to be Unemployment is expected to peak at 10 percent nationallh and remain at or above 9.5 percent through next Budget deficits are expected to remain well abover $1 trillion this year and next year. The 13-membert committee forecasts the 10-yeadr Treasury bond yield will stay inthe 3.75 percen to 4.25 percent range through next year becausse core inflation is forecast to fall towardsx 1 percent. However, the committee is concerned about the risinv trend in federal debt and the implicationzs for inflation riskbeyond 2010.