On balance, the past week earns a “not so bad” as far as the world’s economic travails go. President Obama flew into the G-20 meeting facing fractious world leaders; at the end of the day the confab agreed to fill the IMF’s wallet with a notional $1.1 trillion, support free trade, curb tax and financial fraud, and re-regulate the financial system without an international czar, at least for now.

The European Central Bank continued to bite its lip and lowered its rates again. ECB president Jean-Claude Trichet pointed to “the expectation that price pressures will remain subdued, reflecting the substantial past fall in commodity prices and the marked weakening of economic activity in the euro area and globally.” And the Federal Reserve reached multi-billion dollar reciprocal swap agreements with the Bank of Japan, the Bank of England, the ECB, and the Swiss National Bank to insure foreign currency liquidity.

Three reports from the Conference Board suggest that the descent to the bottom may be decelerating, at least. The board’s Employment Trends Index fell again in March, but the “decline was not as strong as in the previous four months,” according to Conference Board senior economist Gad Levanon. Its latest Consumer Confidence Index actually rose a wee bit last month—to 26 from 25.3 in February, which was an all-time low. The Present Situation Index went down; the Expectations Index went up. Lynn Franco, director of the Consumer Board Research Center cautions that Americans are still very, very pessimistic and don’t see things getting better in the next six months.  And in an okay news/bad news report, the Conference Board projected growth in world output at 1.3 percent but a 2.5 percent decline in growth for advanced economies, including a 5.9 percent slump in the U.S.

World equity markets ignored the abysmal unemployment reported by the U.S. Department of Labor, at least for one day. But the Dow Jones Industrial Average dropped back below 8,000-point yesterday, after a fairly sustained 4-week rally.

This time of global de-leveraging will prove to be acutely painful, many economists believe. “The [U.S.] economy is unlikely to turn up before the end of this year, if then, and its prospects for a recovery, once one is underway, remain seriously limited,” writes David Levy, chairman and director of the Jerome Levy Forecasting Center in his latest outlook. “With a plethora of potential financial crises threatening serious to catastrophic consequences, there is much that could go wrong in 2009 and 2010,” according to Levy. He contends that “private sector balance sheets can no longer grow and must shrink relative to incomes for years.”

Sal Guatieri, senior economist at BMO Capital Markets is battening down the hatches, too. “A quick recovery isn’t impossible, but at the moment the data suggest the downturn is merely slowing, not reversing,” he observes in BMO Capital Market’s April 3rd weekly research note. “It might take half a decade before the economy returns to full capacity.” The good news? Low inflation.

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