The Blue Chip Economic Indicators survey, which since 1976 has polled America’s top business economists, collecting their forecasts in terms of economic growth, inflation, interest rates, and a host of other critical indicators of future business activity, released on Friday its findings. The survey showed that 86% of respondents believed that the economic contraction would be declared to have ended in the second half of this year.
“Real GDP contracted very sharply during the first quarter of  and will continue to shrink, albeit more slowly in the second quarter before turning very modestly higher in the third and fourth quarters,” the survey said.
According to the survey real GDP would contract by 2.6% this year on a Y/Y basis. Meanwhile, spending will be sustained by tax cuts from the government’s $787 billion stimulus package. The survey also said: “The huge output gap created by the recession implies that unemployment will continue to rise well into 2010.” [via Reuters]