Want to know were the economy is going in the next year or so? There will be no turnaround until the real estate market and the mortgage-based bonds based on it turn around. That will not happen for more than a year, maybe more. Calculated Risk posted excerpts from Fitch Ratings.
Essentially Fitch predicts that "...from the first quarter of 2009, home prices will fall an additional 12.5% nationally and 36% in California, with home prices not exhibiting stability until the second half of 2010. To date, national home prices have declined by 27%."
Those drops in home prices are going to go straight to the capital accounts of the banks that have mortgage-backed bonds as their basis. The banks are being slow to lend even now in large part because they don't know how long they will have to hold out before their portfolios rebound and can be sold for something close to what is on the bank books at present.
Until the banks themselves generally get back into the economy, unemployment will at best stabilize at a nasty high level. Employment will not pick up until the banks start lending to start ups again, and that's NOT going to be this year.
In the meantime, the layoffs from GM and Chrysler are continuing apace, and will last a while. Each dealership layoff will effect several other local jobs, so employment will continue to be depressed for that reason also. (Question: how soon will Penske take to outsource the Saturn to China? That was what he originally planned, and keeping the American plants open is merely an expensive publicity stunt. It won't last.)
There are no significant plans reported that will actually increase employment, and without increasing employment, the national consumption will remain depresses. Businesses will not throw money at significant start ups until there is a predictable consumer market. Do not plan on that for over a year from now.
Forget the "economic happy talk" based on market blips. Those are based on stock trading considerations, not economic considerations. Short-term changes in the market are primarily based on trading considerations. You should realize by now that the stock markets are clearly NOT good and reliable predictors of the economic directions.
And no, I as of yet have no clue how much over a year it will be. Essentially the economy is not going to turn around in the next year to fifteen months at the earliest.