The U.S. economy should be looking a little brighter by year's end, as credit markets return to normal and corporate profits increase investor confidence.

That is the consensus opinion of economists and financial analysts, who say the risk of a deep recession remains small.

"We will have a continued slowdown, but we don't expect a recession," said Dan Rutledge, an associate professor of business at Purdue North Central.

By the fourth quarter, the economy as a whole should be recovering, but there will be no boom, Rutledge said.

"If you go into a deep recession, you come out of it sharply," Rutledge said. "If you go into a shallow recession, you tend to come out of it slowly."

Federal Reserve Chairman Ben Bernanke, in his most recent economic update, said the risk of a substantial downturn has diminished greatly the last month or so.

Monetary and fiscal stimulation, along with an ebbing of the drag from residential construction, progress in repairing credit markets, and solid demand from abroad, should offset headwinds still facing the economy, Bernanke told a gathering of bankers in Boston on June 9.

Six months from now, there will be a distinctly better situation, with strong corporate profits boosting capital spending, according to Charles Carlson, CEO of Horizon Publishing, publisher of Dow Theory Forecasts.

Markets could soon begin to make substantial moves, as they often do when there is a lot of skepticism, Carlson said.

A return of investor sentiment will be the key to putting markets on an upward tack, according to Don Nelson, first vice president of investments at Merrill Lynch, in Merrillville.

Many fundamentals remain strong, but credit markets and the slumping housing market continue to feed investor skepticism, Nelson said.

Of course, how long and how deep the current slowdown will become depends on where one stands.

"They don't see what I see," said Pam Stalling, executive director of Consumer Credit Counseling of Northwest Indiana. "I see the lowest denominator, because I'm here with the people."

The agency has seen a flood of people seeking help in fending off threatened foreclosures and evictions.

"By next year, we should have already adjusted," Stalling said. "I don't see anything good happening until at least this time next year."