Surveys say 3Q will see the last of recession

Surveys of economists by both The Wall Street Journal and Blue Chip Economic Indicators, reported by Reuters, show that most respondents believe the recession has ended already or will end in the third quarter of 2009.

The recession began in December 2007, and has been the worst in U.S. history since The Great Depression of the 1930s.

According to the WSJ, 27 of the 47 economists that responded to the survey said the recession had ended and 11 saw a trough this month or next. "Gross domestic product in the third quarter is now expected to show 2.4 percent growth at a seasonally adjusted annual rate amid signs of life in the manufacturing sector, partly spurred by inventory adjustments and strong demand for the 'cash for clunkers' car-rebate program," the WSJ reported.

The employment report for July, in which employers cut only 247,000 jobs and the jobless rate fell for the first time in 15 months, was better than expected and suggests the worst is over, according to the WSJ. Although the unemployment rate is expected to rise to 9.9 percent by December, economists forecast that far fewer jobs will be lost over the next 12 months than they had forecast in July.

About 90 percent of the private economists the Blue Chip Economic Indicators surveyed said believe the economic downturn will conclude this quarter, according to Reuters.

Their assessment followed the release of data showing the gross domestic product (GDP) contracted at a 1 percent rate in the second quarter after falling 6.4 percent in the first quarter of the year. Other recent data, including housing and key labor market indicators, have indicted a bottoming in the recession and the economy close to turning the corner, according to Reuters.

Meanwhile, the Blue Chip and WSJ surveys' findings are similar to a Reuters poll published in July, which predicted growth in this quarter, as well, though a "brisk pace of expansion" was not expected until late 2010.

"Debate now centers on the speed, strength and durability of the recovery," the survey said.