Susie Blackmon's Posterous - Filed under 'economic recovery'

A Rocky Road to Economic Recovery

By PHIL IZZO

The worst recession since the Great Depression has left a scorched landscape that will weigh on the labor market and the broader economy for years to come, according to economists in the latest Wall Street Journal forecasting survey.

The 48 surveyed economists expect the economy to bounce back from four quarters of contraction with 3.1% growth in gross domestic product at a seasonally adjusted annual rate in the just-ended third quarter.

Charts and Full Results

See forecasts for growth, unemployment, housing and more. Plus, views on the auto industry, ranking Fed chairmen, grading policymakers and more. Survey conducted Oct. 2-6. (Or download all data as .xls)

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Expansion is seen continuing through the first half of 2010, though at a slower rate. But the massive downturn means the labor market will take years to heal. On average, the economists don't expect unemployment to fall below 6% until 2013; unemployment hit 9.8% in September.

"Never before has business shed so many workers so fast, so many people failed to find work who are looking for work, and so many dropped out of the labor force as in the current circumstance," said Allen Sinai at Decision Economics.

The labor market's tough road was underscored by Thursday's report on weekly applications for unemployment insurance. The Labor Department reported that initial claims fell 33,000 to 521,000 in the week ended Oct. 3. The number of people collecting unemployment insurance also fell, but remained above six million.

About the Survey

The Wall Street Journal surveys a group of 52 economists throughout the year. Broad surveys on more than 10 major economic indicators are conducted every month. Once a year, economists are ranked on how well their forecasts have fared. For prior installments of the surveys, see: WSJ.com/Economist .

Some economists worry the economy will turn down again over the next 12 months, leading to a so-called double-dip recession.

—Conor Dougherty contributed to this article.

Read entire article here.

Write to Phil Izzo at philip.izzo@wsj.com
Printed in The Wall Street Journal, page A3