Recession predicted to end this fall

Published: Saturday, Jan. 10, 2009 12:54 a.m. MST
 |  E-MAIL | PRINT | FONT + - 
Circle your calendars: Sept. 15, 2009, is when the recession will end, according to Mark Zandi, chief economist and co-founder of Moody's Economy.com.

Zandi told a crowd of nearly 350 people on Friday morning that while certain elements of the economy will bottom out before or after that date, Sept. 15 is his prediction for the official end of the current recession.

He noted, however, that his timeline and recession-ending date is "subject to revision."

"Not that the economy will come roaring back in 2010, but the decline in economic activity will abate at that point," Zandi said during his keynote presentation before the 23rd annual Economic Report to the Governor was announced.

Zandi said the current recession will be the worst since World War II and last 21 months — twice as long as the 10-month recession average.

"The outlook, at least through '09 to 2010, is extraordinarily difficult. The first half of '09 will be very painful. The second half of '09 will be just painful," he said. "2010 will be uncomfortable. It really won't be until 2011 before we begin feeling much better about the health of the economy."

Story continues below
The downturn is reflected most in job markets, with 2.6 million jobs lost during the past year. Zandi predicts 5 million will be lost during the recession's run, with a 9 percent national unemployment rate in early 2010, contrasting with a pre-recession rate of 4.4 percent.

"That is the biggest increase in the unemployment rate in any recession we've experienced since World War II," he said. "That is probably the best measure of the severity of the economic downturn."

People are in "financial panic," he said. "There's an element of sheer fear and irrationality to what we're going through. People are literally putting money into the mattress, selling stocks, selling homes and other assets and going into cash."

"The panic is past its worst, but it continues on. And as long as it continues on, the risks to our economy are very significant," Zandi said.

The current credit crunch, he said, "is a significant weight" on economic activity. "Credit is the mother's milk of economic growth. Without credit, you don't get loans. As long as the financial system is in disarray, you're not going to get bond issues, and if lenders are tightening, the economy will struggle."

But reasons for optimism include lower energy costs, housing becoming more affordable — although home prices in Salt Lake City will continue to see declines — and policymakers taking action.

Recent comments

Buy "made in USA". The trade deficits over the last 20 plus years...

keepingyourdollars | Jan. 11, 2009 at 12:20 a.m.

Don't forget Tax incentives for Companies that move to China and...

jct | Jan. 10, 2009 at 11:01 p.m.

Throughout the year, and especially over the last several months, the...

Bro Chuck's Rant n Rave's | Jan. 10, 2009 at 6:48 p.m.

Image

Mark Zandi, an economist with Moody's Economy.com, speaks to Utah business leaders Friday at the Hilton, just prior to Gov. Jon Huntsman Jr., who spoke after accepting the 2009 Economic Report to the Governor.

previousnext

Latest comments

Hall deserves this award.... just ask him.

Homeless keep their focus on family

As the temperature dropped last night, I was thinking about what it would be...

Closing the cave is the right thing to do right now. May this young man rest...

Letters: Woods need not explain

Not exactly ... Lots of states still have laws on the books re what tiger did...

Woods says he let family down

...had to put as much effort into getting married as he does to stay on top...

I can't vote for am a man who had 5 sons and none of them, not one of them,...

This is the first time I have ever responded to a blog or an newspaper...

Letters: What about the woman?

So the other woman threw herself at Tiger Woods? How the heck would you know...

This is how illegals work. They will only visit ER's where they know they can...

HD helped The mtn. immensely

The only reason Max's comments were blown out of proportion is Utah fans,...

Advertisements