Thanks! This is the type of news we need to hear on a regular basis.
Even Mr. Doom and Gloom himself -- the president -- said that there were some glimmers of hope. So things are looking up! --- In FairfieldLife@yahoogroups.com, I am the eternal <l.shad...@...> wrote: > > http://www.cnbc.com/id/30111906 > > By: Albert Bozzo, Senior Features Editor | 09 Apr 2009 | 11:55 AM ET > > You've heard all the gloom and doom about this recession. Now here's > some good news: the economic recovery could happen much soonerand be > much strongerthan anyone thought possible. > > Suddenly, a small but growing group of private-sector economists is > disputing the idea that the recession will drag on for months and that > the rebound will be as weak as those following the the 1991 and 2001 > downturns. > > "Too many people's idea of recession have been formed by the last two > recessions," says Robert Brusca of Fact & Opinion Economics, referring > to the 1991 and 2001 periods, which were both short and shallow. "I > think that's mistaken." > > "People have been talking about an L-shaped recession," adds Michael > Mussa, senior fellow at the Peterson Institute for International > Economics. "The record shows you come back sharply from deep > recessions" like the current one. > > These economists and others see a V-shaped pattern, similar to that of > the recession-recovery periods of the 1970s and 1980s. And they say > there is ample evidence to support it. > > Among the reasons for the new optimism: a significant easing of the > credit crunch, improvement in consumer spendingincluding better auto > salesa potential bottom in housing, a less-grim jobs picture and > expectations that the government's massive stimulus spending could > start boosting economic growth almost immediately. > > That doesn't mean anyone is saying the recession is over yet. But the > end is closer than people think. > > Though the decline in first-quarter growth will be along the lines of > the six-plus percent plunge of the fourth quarter of 2008, some > economists now expect a flat or slightly negative showing in the > second quarter, followed by the beginning of sustained growth in the > third quarter. (That's three months sooner than what many were > forecasting several months ago.) > > Optimists acknowledge that existing headwinds and unforeseen events > can quickly derail momentum, which may help explain why a majority of > opinions--including that of the the Federal Reserve--still fall into > the wait-and-see camp. > > "The velocity of downturn is lessening," says John J Castellani, chief > economist and president of the Business Roundtable, who is more > cautious than hopeful at this point. "In the initial part of the > recovery, people will be very cautious about this being a double dip." > > Nevertheless, those forecasting a strong recovery point first and > foremost to the waning effects of the Lehman Brothers collapse last > fall, which roughly coincides with the worst of the credit crunch, and > triggered a massive chain reaction in payroll and production cuts. > > "The initial adjustment tends to be too big, then there's some > reversal of that," says Ram Bhagavatula, managing director at the > hedge fund, Combinatorics Capital. > > That dynamic will lead to swifter and stronger recovery in both the > economy and employment that many economists are forecasting. > > Mussa, a former White House and International Monetary Fund economist, > says that GDP will be a cumulative 6-8 percent higher six quarter than > the bottom, depending on whether the recovery starts in the early or > late summer. > > Brusca is expecting a minimum of 4.5 percent GDP growth over the first > four quarters of the recovery > > All About The Economy > > Both performances compare favorably with the post-WWII average, and > while they may be less than the recoveries of the 70s and 80s they are > significantly more than those of the past two recessions > > In the 70s cycle, GDP shrank two consecutive years then posted GDP > growth averaging 5 percent in 1976-1977; in the case of the 80s, the > economy contracted 1.9 percentmore than economists expect for full > year 2009then grew 4.5 percent in the first year of recovery. > > By contrast, the 2001 recession was so brief and shallow, GDP didn't > register a contraction for the whole year. Growth in the 2002-2003 > period, however, averaged just 2 percent. Similarly, in 1991, the > economy shrank 0.2 percent, followed by 3-percent growth in 1992 and > 1993. > > Economists also cite several reasons for better labor market > conditions this time. They expect job losses as well as the > unemployment rate to peak close to the time growth bottoms out, as was > the case in the 80s and 90s, and thus not resemble the jobless > recoveries of the two most recent recessions. >
