Recession Fears Overblown: Economists

Fed's actions key strong economic reports, signs of market recovery
By Jim O'Neill,  Newser User
Posted May 14, 2008 9:50 AM CDT
A cashier rings up groceries at a Chicago supermarket Monday, May 12, 2008. Food prices have continued to rise.   (AP Photo/Charles Rex Arbogast)
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(Newser) – A growing number of economists are saying, cautiously, that the US might have pulled back from the brink of recession, the Wall Street Journal reports. The experts credit swift action by the Federal Reserve to lower interest rates and save Bear Stearns in March, and even the ongoing distribution of fiscal-stimulus checks, as catalysts for the detour.

"A couple months ago it seemed like we were on the abyss," one economist said. "Things have changed.” Experts cite improvements in the stock and credit markets and several surprisingly strong economic reports as evidence things aren’t as bleak as expected. But, they warn, the still-sluggish economy could still slip into a prolonged, shallow downturn.