Economists say there will not be double dip recession

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In the cover story of the latest issue of BizTimes Milwaukee, several Milwaukee-area economists say the U.S. economy is not likely to enter a double dip recession, despite high unemployment, a dismal housing market, the financial turmoil in several European countries and the continuing oil spill in the Gulf of Mexico.

“The traditional indicators that historically preceded a downturn in economic activity, an inverted yield curve, a high real fed funds rate and upward movement in inflation and a decline in leading indicators – all of those indicators are absent today,” said Keith Hembre, chief economist for Minneapolis-based U.S. Bancorp. “That would be the basis for saying that a double dip within the next six, nine or twelve months is just an unlikely occurrence.”

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However, the U.S. economic picture is far from rosy. Instead of the robust recovery that seemed likely late last year and early this year, most economist tell BizTimes that the U.S. is in for a long climb out of the Great Depression.

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“In terms of the growth rate, I am suggesting that the growth rate will be about 3 percent for 2010 and maybe slightly higher for next year,” said Abdur Chowdhury, an economics professor from Milwaukee’s Marquette University. “Maybe there will be some improvement next year, but not much more. Four (percent) would be my upper limit (for economic growth in 2011).”

Read more in the latest issue of BizTimes Milwaukee.

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