Group of the leading economists, implementing a new survey, presents a forecast that shows a far deeper and more painful recession ahead in the first half of the year, but a modest pickup in the second half of 2009, followed by a solid recovery in 2010.

The forecasts hold little good news for the first half of this year. The economy is expected to decrease at a 5% rate in the first quarter, even sharper than the 3.8% drop recorded in the fourth quarter of last year. And economists are also forecasting another 1.7% drop in economic activity in the second quarter of this year. They are forecasting a 1.6% gain in economic activity the second half of this year, that won't be enough to overcome the first half weakness, which should result in a 0.9% full-year drop in U.S. economic activity comparing the fourth quarter of this year to a year earlier. That presents to be the biggest drop on that basis since 1982, and far worse than the year-over-year decline of 0.2% recorded in the fourth quarter of 2008.

The economists are forecasting unemployment rising to 9% for the fourth quarter of 2009, up from their previous 7.5% estimate. They expect job losses for the year coming in roughly the same as the nearly 3 million jobs lost in 2008. They also estimate corporate profits to go down 9% this year. Concerning housing starts and auto sales, economists forecast them to continue falling to the levels not seen in decades. It’s obvious that all those forecasts are significantly worse than it was estimated in the November survey.

The economists are forecasting a healthy recovery in stocks from current levels: they estimate the Standard & Poor's 500 to end the year a 975, which would be 26% above current levels and a gain of 8% from where it started the year. However in November the economists had forecast the S&P would end 2009 at 1,200.

This group forecasts that the economy will recover 3.1% growth during the course of 2010. They expect unemployment to start to ease as employers add 1.3 million jobs during the year, and they hope auto sales and housing starts at least make it back to 2008 levels. And though the five most pessimistic economists expect job losses and the unemployment rate to continue throughout all of next year, all in all they are forecasting economic growth during every quarter of 2010. 

According to the specialists’ opinion, the United States are the most likely major economy to emerge from the global recession first. The survey found 34% economists expecting the U.S. back on its feet first, 28% believe China would be the first to recover and 13% consider Canada to be the first, and just about 4% believe European economies to lead in the economic recovery.