Kelley school forecasts 2010 economy

The Business Outlook Panel from the Kelley School of Business recently reported the economy will start recovering in 2010, but progress will be slow, and it will take from 3 to 5 years to completely recover.

In an earlier report from the school, experts from the Indiana Business Research Center determined the recession ended in February, but that the country was still working its way through the aftershocks.

Highlights from the latest forecast include:

- Output growth will be above 3 percent, but lingering effects of the financial crisis will inhibit the strength of the recovery.

- Unemployment will still exceed 10 percent, but about 2 million more jobs will be on the books by the end of the year, 50,000 of those in Indiana.

- Uncertain consumers will keep inflation rates low.
- Housing market prices will increase slowly.

- “Massive spending and modest revenue growth” will keep the federal budget deficit high.

- Interest rates will increase somewhat but remain low “by historical standards.” Mortgage rates will average 5 to 6 percent.