Forecast: New England Economy Slow To Rebound

BOB SALSBERG

BOSTON (AP) — The worst of the recession may be over, but a new economic forecast points to a "slow and weak recovery" in the New England states, with job losses likely to continue until the fourth quarter of 2010.

The report, released Tuesday by the New England Economic Partnership, said the region had lost about 346,000 jobs since the beginning of 2008, with the number expected to top 400,000 before the end of the decline.

The six-state unemployment average should peak at 9.4 percent next year, keeping it below the peak national average, the forecast said.

"Even though the national economy has improved since the spring, many of the fundamentals remain weak," said Ross Gittell, an economist at the University of New Hampshire and vice president of the New England Economic Partnership, in a statement accompanying the forecast.

"Commercial real estate has yet to bottom out and problems in commercial real estate will negatively affect the banking sector and financing in the region," he said.

Declines in household wealth and lack of consumer confidence will also hinder the recovery in New England, Gittell said.