The US economy should pull out of its recession soon but the recovery may be lackluster initially, the closely watched "Blue Chip" economists' survey predicted today.
"With surprising swiftness, the focus of discussion about the US economy has shifted from the extreme gloom that prevailed in the month and a half following the September 11th terrorists attacks to rising optimism that signs of an eventual recovery are already beginning to emerge," a summary of the latest poll of economists said.
However, it added, "Whether the newfound optimism is misplaced or simply premature remains an open question."
Economists in the December poll by Blue Economic Indicators, a Kansas City -based newsletter, projected that US gross domestic product would contract by 1.3 per cent in the current fourth quarter.
While still recessionary, that projection is not as gloomy as the 1.9 per cent decline predicted for that quarter in the November Blue Chip poll.
The newsletter noted that consumer spending has held up better than expected so far, portending a milder contraction.
A fourth-quarter GDP drop would mark the second quarter in a row that economic output has shrunk. GDP is expected to move into the plus column in the first period of 2002 but only marginally so, according to the poll.
In the latest poll, which was conducted on December 3rd-4th, Blue Chip pegged first-quarter growth at 0.4 per cent, a notch lower than the 0.5 per cent rise predicted in November.
The poll forecast growth of 2.6 per cent in the second quarter of next year and 3.8 per cent in the third quarter. Such figures would clearly be consistent with a recovery but not a particularly vigorous one.
According to the National Bureau of Economic Research, considered the arbiter of US business cycles, the US economy entered a recession in March this year, ending a 10-year expansion that was the longest in history.