Recession Is Over, Says PNC Research Unit

PHILADELPHIA - The recession ended after bottoming out between May and July, and inflation should continue falling during the first year of recovery, PNC Investment Research Group said in its August economic report.

The group, which provides research to more than 200 money managers worldwide, is part of PNC Financial Corp.'s Philadelphia subsidiary, Provident National Bank.

It forecast that the economy would grow at a 3% rate over the next year and that corporate profits would rise only 9% - both low compared with previous recoveries.

Long-term interest rates should fall from the current level of just below 8.5%, but the recovery should keep these rates between 8% and 8.5% over the next year, the firm said.

Its investment recommendations still call for a 55% to 45% equity-to-debt mix and no cash position.

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