Economists Predict Recovery to Remain Slow into '11

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Some of America's leading economists are predicting a slow recovery in unemployment and home sales well into 2011.

A recent Associated Press survey of 44 economists found most believe the economy will grow by about 3 percent this year.

However, that won't be enough to bring the unemployment rate down since it takes growth of 5 percent for a year to lower the jobless rate by 1 percentage point.

Economists project that unemployment will decrease to 9.3 percent by the end of 2010 and to 8.4 by the end of next year. They also predicted home prices will remain flat for the next two years.

"The labor market is the scar left over from the economic trauma that we've been through," says Sean Snaith, economics professor at the University of Central Florida, who took part in the survey. "It will be slow to fade."

The U.S. economy started to rebound again in 2009, 18 months after the start of the recession.

In order to ensure that recovery stays on track, the earliest the Federal Reserve would begin raising short-term interest rates is the fourth quarter, according 34 of the economists surveyed.

The survey, to be conducted quarterly, collects the forecasts of leading private, corporate and academic economists based on several indicators, including employment, home prices and inflation.

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