The US recession has probably ended, according to a survey by the National Association for Business Economics that projects growth of at least 3.5 percent in the second half of 2002 and in 2003.
"The resilient economy has weathered a series of shocks remarkably well," said Harvey Rosenblum, the group's president. "It should pick up by the second half of this year."
There's a 60 percent chance the contraction is over, according to the survey of 37 Wall Street and corporate economists conducted this month. That would mean it lasted no longer than the 11-month average for the nine other recessions since World War II.
The recession began last March, according to the National Bureau of Economic Research, the unofficial arbiter of US business cycles.
The National Association for Business Economics panel also projected the recovery will develop more quickly than in earlier estimates.
The economy should grow at a 1.3 percent annualized rate in the first quarter, up from an estimate of 0.2 percent growth in the last NABE survey, three months ago.
At that point, many analysts were concerned that consumers would take a breather after a record pace of auto spending in October.
The strength of consumer spending helps explain why analysts project a 2.9 percent annualized growth rate in the second quarter, followed by a 3.5 percent growth rate in the third quarter and a 3.9 percent pace in the fourth quarter.
The second-half growth rates are close to what analysts say is the economy's potential, defined as the maximum possible pace of growth without stoking inflation.
Those rates should be sustained through 2003, the survey said.
"By 2003, the panel sees a hearty, though not spectacular, recovery," according to the summary of the NABE quarterly outlook.
Consumer spending is expected to rise at a 3.3 percent annual rate next year, causing imports to flow into the country.
Growth rates have reached 7 percent after past recessions.
Federal Reserve policy makers will probably leave the benchmark overnight bank lending rate at 1.75 percent through mid-2002 to give the recovery a chance to gather strength, the economists said.
The panel expects the Fed to raise rates later in the year and through next year.
Tame inflation will let policy makers hold off raising rates for now, the survey found. Inflation as measured by the consumer price index is likely to rise 1.5 percent this year, down from 1.6 percent last year and less than what analysts say is the 2.5 percent long-term rate of increase.
Unemployment will probably increase this year, with the jobless rate averaging 6 percent, the survey respondents said.
That compares with a 4.8 percent rate last year.
Respondents expect joblessness to slip to 5.7 percent next year.
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