Pollert: V-Shaped Recovery Unlikely

NEW YORK CITY-Green shoots notwithstanding, don’t look for the economy to come back strong next year, says CapLease president William Pollert in a bimonthly report. “Given the depth of the recession and its origin in a meltdown in the financial markets, economic recovery is likely to start slow and remain tepid through 2010,” Pollert says. He adds, “although the economy appears to be bottoming out, no strong foundation is in place” for a V-shaped recovery.

The rate at which economic growth picks up steam in 2011 and beyond depends largely on the federal government’s success at managing $12.5 trillion worth of bailout and stimulus programs while keeping a lid on inflation, Pollert says. He calls this “a very challenging balancing act, even in the best of times.”

However, Pollert cites a number of other factors that are likely to put the brakes on recovery for some time. Among these is consumer spending, whether for durable goods or housing. Both have been hit hard by declines in home prices and individual net worth. Putting a further chill on any consumer exuberance is the specter of a 10% unemployment rate in the first or second quarter of 2010.