Next year's recovery?

The second half of 2009 is seen as the beginnings of economic growth, according to the WSJ survey of economists. Mind you, this is the average expectation of the 54 economists queried. There are still plenty of pessimists who figure that the downturn will last through all of 2009 (and the really downbeat ones aren't that hopeful about 2010 either). Like many of those surveyed, Cal State economist Sung Won Sohn says another economic stimulus package will help, but it will not be a cure-all.

"It's tantamount to taking aspirin, as it will only temporarily ease pain," said California State University's Sung Won Sohn, who cited rebuilding confidence as essential for recovery. President-elect Barack Obama "needs to extend unemployment, work to stem foreclosures and use other plans to demonstrate that he's doing something. To stabilize confidence, you need programs to ease pain. People see that they can count on you, and confidence recovers," he said.

On average, respondents expect the unemployment rate to reach 7.7 percent by December 2009. That's quite a bit lower than the 8+ percent forecasts among some analysts. Indeed, the WSJ survey suggests a downturn on par with the 1990 recession, but not the levels seen in the early 1980s or 1970s.