The Wall Street Journal says its latest forecasting survey of US economists shows a rocky road to recovery. It says the worst recession since the Great Depression has left a scorched landscape that will weigh on the labour market and the broader economy for years to come.
The 48 surveyed economists, not all of whom answer every question, expect the economy to bounce back from four quarters of contraction with 3.1% growth in gross domestic product at a seasonally adjusted annual rate in the just-ended third quarter. Expansion is seen continuing through the first half of 2010, though at a slower rate. But the massive downturn has left an open wound in the labour market that will take years to heal. On average, the economists don't expect unemployment to fall under 6% until 2013; unemployment in September hit 9.8%.
On average the economists expect the unemployment rate to peak at 10.2% next February. But even once the employment situation stops getting worse, economists expect recovery to come slowly. It took just 14 months for the unemployment rate to rise from 5.8% to its current level. On average, the economists say it will take nearly four years for the rate to drop below 6% again.
