Back in 1966, members of the now-forgotten band "The Happenings" reached number three on the Billboard charts with "See You in September." Economists of today are humming the same tune.
The USA Today/IHS Global Index shows "increasing evidence" that the recession will end in September and that a "mild" recovery will begin in October, according to a report on the USA Today website. A survey in May from the National Association for Business Economics reached the same conclusion, Bloomberg News reported. What's the reason for the optimism?
Seven of the eleven leading indicators in the USA TODAY/IHS Global Insight Economic Outlook Index were positive contributors in May, and eight were positive in April.
"The decline in real GDP growth accelerated from minus 3.5 percent, at a six-month annualized growth rate, in December 2008 to minus 6.2 percent in March," the paper reported. "It is expected to slow to minus 4.5 percent by June, before moderating close to the break-even point in October. Recent gains in the index, though small, have been consistent, which is a good sign."
The NABE survey was similarly upbeat, arguing indicating experts believe the worst of the U.S. credit crunch and housing slump is almost over. Economists forecast that growth will pick up to 2.1 percent in the second half, and more than 60 percent of survey respondents predicted that credit will be easier to obtain in the second half of the year.
Economists are not ready to give each other high-fives yet -- though such a sight would no doubt be unintentionally hilarious -- because there remain plenty of dark clouds.
Oil prices have recently surged from $35 per barrel to $72 per barrel though the International Energy Agency said today that demand would be less than originally expected, which should help keep a lid on prices. Experts also predict that unemployment could hit above 10 percent, depressing consumer spending at a time when the recovery is trying to gain traction. It already is at double digits in hard-hit states such as Michigan and California.
The housing market remains horrible though its showing signs of improvements. RealtyTrac today reported that the number of properties in some stage of the foreclosure process rose 18 percent in May compared with a year earlier. It does show a six percent decrease from the previous month, but was still is the third-worst month on record. Foreclosures may continue to climb as restrictions on the ability of banks to reposes homes come to an end.
For Americans who have taken huge hits to their financial well-being, terms such as "recession" and "recovery" may have lost their meaning. They are going to see more proof that things are getting better beyond cool, analytical charts.
Economists: See you in September