According to the Friday report from the Blue Chip Economic Indicators survey of private economists, the US economy will likely overcome recession in the second half of 2009, but unemployment will continue to be on the rise well into the next year!

Nearly 86 percent of the private economists surveyed opine that they hope to see the back of the ongoing recession - now into its 16th month - by this year's second half, with the recovery of consumer spending and the housing sector. The survey said that lower inflation, tax cuts from the $787 billion federal stimulus package, and extension of unemployment benefits, will together support consumer spending.

About the projected end of recession, the survey affirmed: "Real GDP contracted very sharply during the first quarter of this year and will continue to shrink, albeit more slowly in the second quarter before turning very modestly higher in the third and fourth quarters."

At the same time, the economists also said that the current 8.5 percent unemployment rate will further increase, and touch a peak of 9.8 percent in 2010. Despite the expected upgrading of the economy's fortunes, companies might persist with lay-offs even in the coming year.

The survey stated: "The huge output gap created by the recession implies that unemployment will continue to rise well into 2010."