Economic recovery to remain sluggish into 2011!
WASHINGTON - April 12, 2010 - The pillars of Americans' financial security - jobs and home values - will stay shaky well into 2011, according to an Associated Press survey of leading economists.
The findings of the new AP Economy Survey, released Monday, point to an economic recovery that will move slowly and fitfully this year and next. As a result, the Federal Reserve will be forced to keep interest rates near zero until at least the final quarter of this year, three-fourths of the economists said.
The new AP survey, which will be conducted quarterly, compiles forecasts of leading private, corporate and academic economists on a range of indicators, including employment, home prices and inflation.
Among the first survey's key findings:
* The unemployment rate will stay stubbornly high the next two years. It will inch down to 9.3% by the end of this year and to 8.4% by the end of 2011. The rate has been 9.7% since January. When the Depression started in December 2007, unemployment was at 5%.
* Home prices will remain almost flat for the next two years, even after plunging an average 30% nationally since their peak in 2006. The economists forecast no rise this year and a 2.3% gain next year.
According to these unnamed economists, the economy will grow by 3% this year, which is less than usual during the early phase of a recovery and the reason unemployment will stay high. It takes growth of 5% for a year to lower the jobless rate by 1% point.