'US economy to resume growth in 3rd quarter'

The US economy will resume growth in the second half of this year while the unemployment rate is expected to peak in 2010, a survey shows. The consensus forecast of panelists surveyed for the Blue Chip Economic Indicators newsletter for May, released on Sunday, put the inflation-adjusted gross domestic product (GDP) growth in the third quarter of 2009 at a 0.5 percent annual rate, compared to a month-earlier forecast of a 0.4 percent rise, Reuters reported. The US economy is predicted to grow 1.8 percent in the fourth quarter, the survey shows, compared with a 1.6 percent rise forecast a month ago. Although panelists expect the economic downturn to ease in the second quarter of this year, about 32 percent of them believe the US jobless rate will continue to rise through the year, peaking at 10 percent in the first quarter of 2010. The survey, conducted May 4-5, indicates a belief that the US economy will shrink 2.8 percent in 2009, which is worse than their April forecast of a 2.6 percent decline. The GDP will rise 1.9 percent in 2010, up from the 1.8 percent forecast in April. The May consensus forecast from the economists saw the second-quarter GDP contracting at a 1.7 percent annual rate, 0.4 percentage point better than was forecast a month ago. A US Labor Department report on Friday put the number of job losses at 539,000 in April, pushing the unemployment rate to 26-year high of 8.9 percent. However, the figure was less than analysts' forecast of 590,000 job losses and the March figure of 699,000 layoffs. Some economists believe the better-than-expected data hints that the recession in the US is bottoming out; economic activities are expected to gradually recover toward the end of the year.