The pace of contraction is slowing, which means the economy is beginning to sort of recover, economist Nouriel Roubini said.
"After the sharp contraction in economic activity in 2009, growth will reenter positive territory only in 2010, and then at a very sluggish rate, well below potential," Roubini wrote in his blog at RGE Monitor.
Even if economic activity stops contracting by the end of 2009, that might not mark the official end of this recession, Roubini said.
“Recessions are not measured exclusively by GDP contractions,” he said.
“Unemployment, industrial production, real manufacturing, wholesale retail trade sales and real personal income (less transfer) are all considered when it is time for the National Bureau of Economic Research (NBER) to put dates around recession periods…,’’ Roubini said.
“U.S. real GDP will stop contracting at the end of 2009, but it is likely that many of the above indicators will not bottom out (or peak, in the case of unemployment) before mid-2010.’’
The Federal Reserve’s Open Market Committee recently voted to maintain the target federal funds rate for interbank lending at a record-low range of zero to 0.25 percent, and reiterated that it’s likely to keep rates at low levels "for an extended period" of time.
"I guess it's a committee that's decided they're content with what they've done and content to wait longer and see what effect these programs are having on the economy," Michael Feroli, economist at J.P. Morgan Chase, told The Wall Street Journal.
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