Not only does the future look bright, but the present may not be that bad either, a survey of leading economists showed on Thursday.

Of the 37 economists who took part in a February survey conducted by the National Association for Business Economics, 60 percent said the first U.S. recession in a decade is already over.

The upbeat tone is a sharp contrast from January, when NABE economists said job losses would ensure economic growth will be weak in the near-term. While U.S. employment is still not expected to grow sharply, the economists forecast healthy growth near 3 percent in 2002, and even stronger growth next year.

"America's longest expansion in history has been followed by one of the shortest, shallowest recessions on record," said Harvey Rosenblum, president of the association. A recession is generally defined as two consecutive quarter of economic contraction.

"The resilient economy has weathered a series of shocks remarkably well. It should pick up steam by the second half of this year and maintain 3.5 to 4 percent growth throughout 2003," said Rosenblum, who is also senior vice president and director of research at the Dallas Federal Reserve.

Only a small minority -- two of the 37 panelists -- does not expect to see sustained growth in the second half of 2002.

Consumer spending is expected to remain resilient. The panel revised up prospects for housing and consumption expenditures, and sees spending growth of 3.3 percent by 2003 -- up 50 percent from 2002.

The economists lowered expectations for capital spending -- one of the main strengths behind the U.S. recession -- but they still expect capital expenditure to pick up in 2003. By next year, investment is seen rising at a 6.4 percent rate as the economy recovers from the hangover of the excess spending of past years, the survey showed.

FED SEEN RAISING RATES AS GROWTH PICKS UP

With inflation expected to stay tame, the economists are almost certain the U.S. Federal Reserve will raise interest rates in 2002. But most of the forecasters expect the Fed to take action later in the year, when economic growth picks up.

More than 90 percent of the panelists expect tighter monetary policy this year, but only 15 percent expect rate hikes before the end of the second quarter.

The median estimate for gains in the Consumer Price Index is 1.5 percent in 2002 and 2.3 percent next year.

Steady productivity gains, seen in line with those made in the late 1990s, will damp inflationary pressure, but will also keep Americans out of jobs, the panelists forecast.

The U.S. unemployment rate is expected to climb to 6.0 percent this year and retreat slowly to 5.7 percent in 2003.

ROAD TO RECOVERY SEEN SMOOTH

Most panelists are also optimistic that the road to recovery will be smooth, seeing only a 20 percent chance that the economy will slip back into recession after a brief recovery.

Only 5 percent of the panelists thought the recent spate of bankruptcies constituted a large risk to the economy.

The NABE panel was not overly concerned about the U.S. fiscal picture. While the government has projected deficits for the next few years, panelists see spending growth easing back to 2.5 percent after an unusually high 4.5 percent expected this year. The expected pickup in economic growth will also help keep deficits in check, the panelists said. They expect a deficit of $35 billion in fiscal year 2002 and $40 billion in the next fiscal year.

More worrisome to the panelists was the sluggish Japanese economy, which has suffered a decade of dead-slow growth. After one of the most synchronized and global downturns the world has experienced, 85 percent of the panel said Japan -- the world's second-largest economy -- topped their list of risks to U.S. economic health.

The NABE survey follows a slew of better-than-expected U.S. economic data that has underpinned optimism that the U.S. economy is on the verge of a strong recovery.

On Thursday, the Conference Board, a private research firm, said its index of leading economic indicators rose for the fourth consecutive month, indicating the rebound could be much stronger than had been expected. The 0.6 percent rise in the index in January came on the heels of a 1.3 percent increase in December -- the largest gain in almost six years.