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By Pedro Nicolaci da Costa
NEW YORK, April 30 (Reuters) - The longest U.S. recession in more than a half-century will probably end before the summer is out, according to the Economic Cycle Research Institute.
The group, whose leading indicators have a solid track record of predicting turns in the business cycle, said on Thursday enough of its key gauges have turned upward to indicate with certainty that a recovery is coming.
"The end of this recession is finally in sight," ECRI said in a statement. Last week, the annualized growth rate of ECRI's weekly leading indicator rose to -18.6 percent, its highest in over six months.
The institute's findings confirm a recent moderation in the rate of decline of certain key indicators. On Thursday, an index of Midwest business activity rose sharply, although it remained in contraction territory.
Other data, such as consumer confidence and home sales, have also showed signs of life after hitting what seemed like rock-bottom.
The Federal Reserve, in a policy statement published on Wednesday, also said that the pace of economic contraction might be easing.
Many analysts note that a lessening of the economic contraction does not a rebound make and that there are several challenges ahead for the U.S. economy, including depressed consumption and a huge loss of wealth via stocks and housing.
However, ECRI notes that a resumption of growth has historically always followed a moderation of economic shrinkage. Observers who dismiss this reality, the group says, will fail to spot the improvement in conditions.
"The 'giant error of pessimism' is now rampant. This is why many will be blind to the light at the end of the tunnel that marks the exit from this recession," said Lakshman Achuthan, ECRI managing director. (Editing by Padraic Cassidy)