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It's MORNING EDITION from NPR News. I'm Linda Wertheimer.

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Just as it took a while to confirm we were in a recession, it will take a while to confirm that we are out. Still, the Federal Reserve now says the economy is stabilizing, and many economists think the economy is finally starting to grow again. That doesn't exactly mean the country is booming, but it does signal a big change from a few months ago.

Here's NPR's Chris Arnold.

CHRIS ARNOLD: Just this past winter, the mood among economists was more than grim.

Mr. STUART HOFFMAN (Chief Economist, PNC Financial Services Group): I was probably the most concerned I've ever been in my career.

(Soundbite of laughter)

ARNOLD: That's Stuart Hoffman. He is the chief economist of PNC Financial Services Group.

Mr. HOFFMAN: Well, markets weren't functioning. Banks couldn't get credit. There was a tremendous amount of fear in the economy.

ARNOLD: And nobody knew where the bottom was.

Mr. HOFFMAN: Yeah, that, you know, the stock market would keep going down, and that the rate of job loss - which was huge - would just continue at six, 7,000,000 a month, which used to be a bad year.

ARNOLD: But this summer, there's been a string of reports showing the economy pulling out of that downward spiral. Home sales are rising again. Job losses aren't nearly as bad. People are buying more cars. And Hoffman says the government's fiscal stimulus is starting to take hold. So he thinks we've successfully avoided what could have been a full-blown depression.

Mr. HOFFMAN: I would make the bold statement that I agree with the majority of my colleagues, economists, that the recession is ending this summer.

ARNOLD: Hoffman was part of a group of 47 economists who were just surveyed by the Wall Street Journal. Most said the recession is now over. Yesterday, the Federal Reserve in a closely watched statement said economic activity is quote "leveling out." Nariman Behravesh is chief economist at IHS Global Insight.

Dr. NARIMAN BEHRAVESH (Chief economist, IHS Global Insight): On the one hand, the Fed is seeing evidence that the economy has stabilized.

ARNOLD: But the Fed also said that household spending - a big part of the economy - is still being constrained. It cited ongoing job losses, tight credit, lower housing wealth and sluggish income growth. A separate report out this morning shows that foreclosures continue to rise, despite government efforts to prevent them. That puts more downward pressure on home prices.

Dr. BEHRAVESH: We're not completely out of the woods yet, so the Fed is keeping all its options open. It's going to stay the course until it's quite confident that the recovery has legs, so to speak, that it's self sustained.

ARNOLD: Over the past year, the Fed has pulled out all the stops to defibrillate the seized-up financial system. It's been pumping huge amounts of money into financial firms. It's been buying up mortgage-backed securities and doing other things to push down interest rates for both average people and big companies. Nariman Behravesh.

Dr. BEHRAVESH: All the unorthodox monetary stimulus that they've unleashed has actually worked. It has averted Armageddon. We didn't go through Great Depression 2.0, and yes, we had the great recession, but it's actually only the great recession by a hair compared with some of the other recessions in the post-war period. So, they really did avert a very bad scenario by doing what they did.

ARNOLD: Also yesterday, a report on the U.S. trade deficit showed that countries around the world are buying more American products again. That's a sign that economies elsewhere are recovering. And Stuart Hoffman says there is another factor: psychology. He says that seems to be stabilizing, too.

Mr. HOFFMAN: I often refer to that as the yeast. If all these other things are the ingredients that help the economy rise - I'm not a baker, but I'm told you need a little bit of yeast. And I think a change in consumer and business psychology - not to be optimistic, but not to be so darn cataclysmic, because at the end of the day, while the economy is about economic policies, it's also about people. And people's emotions still drive the investments that they make.

ARNOLD: Almost nobody's predicting a quick recovery. Home prices are likely to keep sliding this year. Unemployment is expected to remain quite high through 2010. Stuart Hoffman says job growth is always the caboose on the end of a recovery. But, at least, he says, the economic train appears to be back on its tracks and moving forward again.

Chris Arnold, NPR News.

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