Economists predict slow economic rebound

 According to survey of USA TODAY the major of the economists affirms the stock market rally is in a sustainable recovery. If the estimates are correct, we should not be afraid of the repeated recession and fall of the Dow Jones industrial to its March low of 6547.05. The Dow sank nearly 3% Friday to close at 9713 after the government reported consumer spending fell 0.5% in September. Still, the market is expected to rise or fall 10% in the months ahead because of uncertainty about the recovery's strength. In the third quarter the economy showed a healthy 3.5% annual rate growth. But in spite of this the economists predict the slow or U-shaped recovery. Many economists ascribed this instability to one-time steps as the cash-for-clunkers program finished in August; low inventories that are forcing businesses to boost production to restock; and an $8,000 tax credit for first-time home buyers that's set to expire Nov. 30. The sustained demand is necessary, otherwise the economists see growth slipping to 3% or less through 2010. Unemployment is expected to reach its top in the first quarter. The jobless rate — which hit a 26-year high of 9.8% in September — could climb to 10.2%, according to the survey estimation. The improvement on the house market is not expected either despite recent changes in housing prices - as more foreclosed homes flood the market that will not let home values bottoming until the first half of 2010 or later.

Sung Won Sohn, economics professor at California State University, was the lone economist surveyed who gives very bleak prospects predicting economy’s return into recession by early 2011 before mounting persistent growth.

The economists do not approve the additional government aid considering there is no need for a continuing stimulus, and almost 60% don't support an extension of the tax credit for first-time home buyers. But a fourth extension of unemployment benefits is encouraged.