Gross domestic product will contract 5.2% in the first three months of 2009, followed by a 1.8% contraction in the second quarter as the labor market dampens the economy, according to the Federal Reserve Bank of Philadelphia’s survey of professional forecasters, released Friday.

The 43 forecasters surveyed lowered their projections from the forecasts of three months ago, when forecasters anticipated GDP falling 1.1% in the first quarter and growing 0.8% in the second quarter. However, participants still expect economic recovery to begin in the third quarter. On a year-over-year basis, growth is expected to be off 2.0% this year and up 2.2% in 2010.

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