Sep. 29--A recovery is already underway in the U.S. and world economies, but the nation's economic growth isn't expected to bounce back as strongly as it has from previous recessions, a bank economist said Tuesday in Colorado Springs.

All economic indicators point to the U.S. economy growing at a 3 percent rate in the current quarter after contracting 1 percent in the April-to-June quarter and 6 percent in the first quarter, said Keith Hembre, chief economist for FAF Advisors Inc., a subsidiary of U.S. Bank.

A double-dip recession -- in which the nation's economy recovers briefly then begins contracting again -- is unlikely, he said.

Economic growth likely will remain sluggish next year as the Obama Administration's economic stimulus program winds down and tax cuts enacted in 2001 and 2003 expire, Hembre said. He said the stimulus program has added about 3 percentage points to the nation's economic growth.

Still, Hembre doubts inflation will be much of a threat during the next few years, mostly because U.S. manufacturing and industrial capacity are well below capacity, unemployment is at the highest level in 25 years and real estate vacancies are climbing. As a result, he expects long-term interest rates to remain near historic lows. Hembre made his comments at a breakfast with about 100 U.S. Bank clients at the Doubltree Hotel-World Arena.

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