A recent survey of 43 respected economists revealed that 80% believe the recession is finally over. Most are more hesitant to predict when it will feel like the recession is over though. When it comes to the job market, housing prices, the stock market, the credit market, and other measures of the health of the economy, recovery may be just beginning. With an economy that has been very sick for the past two years, it’s not realistic to expect healing to occur overnight. Optimism is certainly increasing though, as the last time this survey was conducted in May, only 18% of the same economists predicted that the recovery would begin before 2010.

Economists watch for signs of recovery in a variety of areas. Here are some thoughts on what’s happening in a few of those areas and how these areas are contributing to the recovery of the overall economy:

- Unemployment: In September, we learned that unemployment had hit 9.8 percent, the highest number we’ve seen for unemployment since 1983. It’s expected that unemployment will hit 10% between now and the end of the year and stay above 10% for at least the first quarter of 2010. The consensus opinion is that unemployment at the end of 2010 will still by 9.5%. As a lagging indicator of the health of the economy, we expect recovery in the job market to take longer than overall economic recovery, but it’s a factor that’s vital to the long term health of the economy.

- Debt: Lenders finally seem to be relaxing their standards for people trying to borrow money, but there is still not a lot of borrowing going on. Americans are more concerned about paying down debt levels than they are about borrowing again. Net lending has decreased for the past two quarters and is down substantially compared to where it was prior to the recession. Debt is important because it provides liquidity for consumers and consumers are the real drivers of economic growth.

- Stocks: The stock market has staged an impressive recovery, hitting its high point for the year during trading on Columbus Day and poising itself for a strong end to 2008. Many economists believe that the stock market has gotten ahead of the economic recovery but in almost every recession over the past 50 years, the stock market has started to recover faster than most other economic measures. The stock market is likely to continue to be volatile but it will be helped by other economic indicators signaling indications of recovery.

With increasing optimism about the health of the economy, it’s easy to choose to forget just how bad this recession has been. While there are positive signals that we can point to about recovery, the economy simply can’t suddenly be strong again overnight. It’s fragile, and economists will be watching closely for signs that the recovery story might be being blown out of proportion. Unforeseen events can also alter the trajectory of the economy as it climbs out of recession so predicting a recovery is far from a perfect science. For the first time in several quarters though, it appears that there are some reasons to let ourselves breathe a sigh of relief.

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Tags: debt, economy, recession, recovery, stock market, unemployment

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