U.S. recession officially over: is recovery ever going to arrive?

• Author: Barkey, Patrick M.

You can be forgiven for missing it - but the worst cession since the 1930s ended in the summer 2009, according to the National Bureau of Economic Research. With sluggish hiring, weak growth, and a whiff of fresh banking problems in Europe and the United States, it sure doesn't feel like the economy is getting better. But with tax policy at last in place, with a weaker dollar and a slowly improving consumer mood, 2011 shapes up as the year that the recovery finally gets rolling in the national economy.

The U.S. economy will grow a bit faster in 2011, but still not fast enough to bring unemployment rates down much from 9.6 percent. Following are the top 10 predictions for the coming year, courtesy of IHS Global Insight, Inc.

Top 10 Economic Predictions for 2011 (Courtesy of IHS Global Insight, Inc.)

1. The U.S. economic recovery will pick up steam as the year progresses. The newly enacted tax package will help push growth close to 3 percent in 2011.

2. Europe and Japan also will see stronger growth in GDP in the second half of 2011. Unless a full crisis envelops the Euro, growth will flatten before improving later in the year.

3. Emerging markets such as Latin America and China will slow, but will continue to grow three times faster than advanced economies.

4. Interest rates will be mostly unchanged in the United States and other G-7 countries, but will rise in Brazil, Russia, China, and India. Central banks are expected to keep rates at very low levels for the next 12 months.

5. Fiscal policy will tighten across the developed economies. Whether by choice or under duress, pressure to close deficits will tighten government belts.

6. Commodity prices will continue their gradual rise. Look for prices to be 5 percent to 10 percent higher for most commodity goods by this time next year.

7. Inflation will not be a problem in advanced economies, but prices will heat up in emerging economies. Consumer price inflation in mature economies will be only 1.5 percent in 2011, compared to 5.5 percent in the developing world.

8. Global imbalances will neither worsen nor improve. The...