The U.S. economy has recovered slightly in recent months, but Cornell economist Steven Kyle predicts that 2010 will bring flat growth, high unemployment rates unlikely to budge, and continued turmoil in the housing market.

Kyle, presenting Dec. 8 at the annual Agribusiness Economic Outlook Conference hosted by the Department of Applied Economics and Management (AEM), shared his gloomy forecast before a large crowd in Kennedy Hall. Expect the economy to plod ahead for another year, he said, as debt-laden consumers close their wallets and banks clamp down on credit.

"I see no reason to break out the Champagne any time soon," said Kyle, pointing to such key economic indicators as unemployment, consumer confidence and industrial production. "We're in better shape today than a year ago, but we still may not have hit bottom. It'll be another year before things start to truly turn around."

The unemployment rate, currently at 10 percent, is a foremost concern, Kyle said. When the jobless who have given up seeking work and those only employed part time are counted, the so-called under-employment rate climbs to 17.2 percent.

In November, however, the American economy shed 11,000 jobs, the lowest month of losses since the recession began two years ago. But Kyle is unconvinced of a turnaround, especially with the added pressures from a slumping housing market and dwindling business investments.

"We may be at a pause, not quite at bottom for unemployment," he said. "Close to 6 million workers, or 4.5 percent of the workforce, have been unemployed for more than 25 weeks. That's a huge number."

Housing data trends also portend more economic trouble ahead, Kyle said. For one, nearly one-quarter of all U.S. home mortgages are in foreclosure or delinquent. What's more, although housing starts have plummeted in the past year, home vacancies continue to tick upward, suggesting that banks are sitting on foreclosed properties until real estate prices recover. Declining commercial real estate sales are unlikely to improve in 2010 either.

"It all adds up to further downward pressure on the housing market," Kyle said.

To boost the economy, Kyle called on Congress to issue a second stimulus package or a major new jobs initiative. He credited President Obama and Congressional leaders for being "admirably quick" with the passage of the first stimulus bill, but criticized it as too small and overly focused on tax cuts.

"Right now, we need government to fill the spending gap in our economy," Kyle said. "The next legislation should be composed to provide an immediate jolt to the economy -- areas like extended unemployment benefits, aid to state governments and infrastructure projects."

Finally, Kyle called for the federal government to institute regulatory measures to prevent the next economic catastrophe. Congress has not yet tightened the controls on rating agencies and credit default swaps, and insurance companies ought to be brought under federal oversight, he said.

"I'm worried that a big opportunity was lost to enact regulatory reforms during the financial crisis," Kyle said. "Not much has been done to curb the next round of financial excess. Without reforms, we are bound to see another collapse."

Brent Gloy, associate professor of AEM, gave an assessment of agricultural markets. Like the broader economy, the agriculture sector continues to cope with instability, as commodity prices fluctuate wildly, Gloy said.

Later, AEM associate professor Antonio Bento shared an overview of opportunities for the agriculture and forestry industries to participate in cap-and-trade scenarios and provide carbon offsets for other sectors.

The conference was held in the College of Agriculture and Life Sciences.