At the beginning of 2009, many Americans feared an economic depression was at hand. In January alone, U.S. employers slashed nearly three-quarters of a million jobs.
Now, as the year's second half begins, most economists are saying the worst of the recession is over, and that slow growth will begin in the fall.
"The hemorrhaging has peaked," said Bernard Baumohl, chief global economist for the Economic Outlook Group, a forecasting firm. "We're on the other side of the recession now."
Baumohl believes the recession, which began in December 2007, may already have ended, and a feeble recovery begun.
Hopes for a faster recovery cooled Thursday when the Labor Department said another 467,000 jobs disappeared in June. In total, 14.7 million people are now unemployed in the United States — or 9.5 percent of the work force.
"The heavy loss of jobs in June is a warning that the road to recovery will be bumpy," Nigel Gault, chief U.S. economist for IHS Global Insight, a forecasting firm, said in a written analysis. "We expect job losses to continue throughout 2009, and the unemployment rate to peak at 10.3 percent in the first half of 2010."
Still, Gault sees the second half of 2009 turning brighter. Despite the gloomy June news, the jobs report "doesn't yet indicate that we have gone off the track" for a recovery, he wrote.
One of the reasons economists believe the year's second half will show progress is the slight improvement in sales of existing homes. Last week, the National Association of Realtors said that in May, pending sales of existing homes ticked up for the fourth consecutive month. Another good sign: New data on manufacturing showed activity is stabilizing after a long, hard slide.
A few economists are still hoping for vigorous growth in 2010 because they see pent-up demand growing for cars and houses. Others have grown more pessimistic, fearing that continuing job losses soon will cause very high rates of credit card defaults, or trigger another spike in home foreclosures.
Until U.S. companies start creating larger numbers of jobs, those big risks will linger. Heidi Shierholz, an economist with the Economic Policy Institute, a left-leaning research group, is among those who fear that the labor outlook will continue to be an enormous drag on the economy.
"Unemployed workers are getting stuck in unemployment for long periods," she said in a written analysis. "In June, 4.4 million people, 2.8 percent of the labor force, had been unemployed for at least six months, surpassing the record high of 2.6 percent set in the early 1980s."
But optimists like Baumohl say economic historians will look back on this summer as a turning point for the better. He notes that average weekly overtime at factories was up to 2.8 hours in June, suggesting that while companies aren't yet ready to hire, they are getting healthier.
"Manufacturing overtime hours is one of the best leading indicators to monitor if you want to understand where the economy stands in the business cycle," he said.