Crisis will effectively come to its end in the second half of 2009

According to the Blue Chip Economic Indicators study released today the U.S. economy is expected to emerge in the second half of the current year along with recovering consumer spending and the housing sector. Still the survey suggests that the unemployment rate will further rise into 2010.

The poll showed that 86% of the respondents believe the economic downturn will likely come to an end in the second half. They say that real GDP contraction that was very sharp in the first quarter will be slowed in the second quarter and turn very modestly higher in the third and fourth quarters.

Economists predict that the improvement in the economy will be driven by some increase in consumer spending, housing, business inventories and exports. However, they note that above-trend growth should not be expected until the second half of 2010.

Analysts say that recent economic data prompt the pace of decline is slowing. The respondents in the Blue Chip survey expect tax cuts from the government's $787 billion stimulus package, the extension of unemployment benefits and lower inflation will lead to consumer spending improvement. Yet, in spite of economy revival companies are forecasted to continue laying off their workers into 2010. The survey expects the unemployment rate to reach 9.8% in the second half of next year.