KNOXVILLE — Although economic conditions for the state and nation remain dire, there are early indications that a slow turnaround may be coming.
That’s the cautious optimism expressed in the spring update to the 2009 Economic Report to the Governor, prepared for Gov. Phil Bredesen by the Center for Business and Economic Research (CBER) at the University of Tennessee. The report’s author is Matt Murray, UT economics professor, CBER associate director and chairman of the Blount County Economic Development Board.
“Pervasive weaknesses are present elsewhere in the economy, and data for the first quarter of the year are nothing less than miserable,” the report says, but adds “at least there are tidbits of good news coming from the economy.”
Among those tidbits of good news: “Consumer sentiment has improved slightly from very depressed levels, mortgage applications are up, the stock market has seen significant gains in recent weeks, and the housing market situation appears to be stabilizing.”
The update reports that a rebound in economic activity should occur in the third and fourth quarters of this year: “Quarterly rates of decline in economic activity will generally decelerate in the next several quarters. Inflation-adjusted gross domestic product will return to the black in the fourth quarter of the year, as will nominal personal income for both the state and the nation. Growth will then be re-established over the course of 2010. Low interest rates and falling housing prices are expected to revive the housing sector, while fiscal stimulus will help prop up the spending side of the economy, together promoting the economic recovery.”
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