Blue Chip Poll: Recession Just About Over
Thursday January 10, 12:02 am Eastern Time
By Caren Bohan
WASHINGTON (Reuters) - The U.S. recession's days are numbered, an influential panel of economists predicted on Thursday.
Blue Chip Economic Indicators, a monthly newsletter, said that more than 90 percent of the private economists it surveyed for its January issue pegged the end of the recession as taking place sometime before the end of March.
``Fresh evidence has emerged that suggests a bottoming in U.S. economic activity is well advanced and that a recovery will take hold relatively soon, barring some new shock,'' the Kansas City, Mo.-based newsletter said.
Blue Chip cited gains for the past three months in consumer confidence and a more stable employment picture as two of the signals of an imminent recovery.
The U.S. economy lost 124,000 jobs in December, according to the Labor Department's monthly employment report released last week.
While the shrinkage of payrolls implied continued weakness, economists were encouraged that the job losses amounted to a fraction of the 400,000 monthly job cuts averaged in October and November.
They also took heart at an increase in worker hours, which suggests companies are working their employees harder to meet increased production demands. In economic downturns, companies often boost worker hours just before they are about to start hiring again.
According to the National Bureau of Economic Research, viewed as the arbiter of U.S. business cycles, the U.S. economy slipped into recession in March. NBER dates recessions and expansions after the fact, and likely will not offer its own declaration on the timing of the recovery until well after it is under way.
Among the Blue Chip forecasters, 37 percent picked March as the most likely time for the recovery to take hold. Twenty-six percent chose February, while 22 percent zeroed in on January.
Nearly 7 percent of the economists said a recovery had already begun in December.
Consistent with a recovery, the Blue Chip panel projected gross domestic product would eke out a small gain in the first quarter of 2002, rising 0.7 percent.
GDP fell 1.3 percent in the third quarter of 2001 and the consensus forecast sees a drop of 1 percent for the fourth quarter. Figures for fourth-quarter GDP are due out later this month from the Commerce Department.
Under the Blue Chip consensus scenario, the economy will pick up momentum as 2002 progresses but its pace will be rather lackadaisical.
GDP is seen growing 2.6 percent in the second quarter, 3.6 percent in the third quarter and 3.8 percent in the fourth.
During 2002 overall, GDP growth was projected at an anemic 1 percent. |
