The markets experienced a late-day rally prompted by Nobel Prize-winning economist Paul Krugman, who during a lecture at the London School of Economics said the U.S. economy will probably emerge from the recession by September.
“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.”
Even with a recovery, “almost surely unemployment will keep rising for a long time and there’s a lot of reason to think that the world economy is going to stay depressed for an extended period,” Krugman said. [Bloomberg]
Last week, Robert Hall, the head of the Cambridge, Mass.-based NBER committee said it’s “way too early” to say the contraction is over.