The United States will likely avoid double-dipping back into a recession but unemployment rates will stay high, above 8 percent at best, says Byron Wien, vice chairman of Blackstone Advisory Services.
"I don't think we are in a recession, I think we are in a bottoming process here."
Bond yield curves may suggest a recession is brewing, although low-long-term interest rates are being affected by fear-based money flows, Wien tells CNBC.
"I am suspicious of the yield curve because long-term interest rates are aberrationally low, and the reason for that is there is so much fear around the world that money is migrating to the U.S., and it has pushed the 10-year Treasury down below 2.5 percent, and I just don't think that is a realistic level."
Stocks will manage to finish 2011 in the black, Wien adds.
"I am still not a bear. I am still optimistic that we'll end the year in positive territory."
Unemployment rates, which have remained stubbornly high since the onset of the recession, will remain a thorny issue.
Wien, who has predicted that unemployment rates would dip below 8 percent, now says they will fall although not as far as he once hoped.
"I'm optimistic that we'll get the 9 percent unemployment rate below 9, into the 8s," Wien told CNBC.
"I had thought we could get into the 7s, but I am less enthusiastic about that. I was optimistic, but I have tempered that optimism, but I am still positive on the outlook."
The unemployment rate currently stands at 9.1 percent, according to the Bureau of Labor Statistics.
Fears of a double-dip recession, when the economy slides into contraction, recovers for a bit and then relapses back into negative territory, have been on the rise in recent weeks.
The debt-ceiling impasse, the Standard and Poor's downgrade of U.S. ratings and debt concerns in Europe have sent stock prices swinging in wild gyrations and consumer sentiment measures plummeting to their lowest levels in 30 years.
Still, some economists say, the economy may be limping along, but it's not contracting.
"There’s nothing in here to suggest the economy is slowing, let alone declining," says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, according to Bloomberg.
"Production continues, and production continues because consumers are still making their purchases."
Companies may not be hiring in droves these days, but they're not laying off workers on such a mass scale either.
"You look at what companies are saying in their earnings calls and there is no indication that companies are cutting back abruptly in their hiring or spending," says Neil Dutta, an economist at Bank of America Merrill Lynch in New York, Bloomberg reports.
"While recession risks are on the rise, a recession is not baked in the cake and the data bear that out."
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