Underlining is by me.
http://hosted.ap.org/dynamic/stories/R/RECESSION_WATCH?SITE=FLMYR&SECTION=HOME&TEMPLATE=DEFAULTJan 21, 3:05 PM EST
By DAVE CARPENTER
AP Business Writer
Whether an actual recession is on the way - or already here - U.S. consumers and businesses are being increasingly squeezed by a downturn that threatens to spread the pain being felt everywhere from the gas pump to the unemployment line.
...
In the last recession,
in 2001, investors took the biggest hit from collapsing technology stock prices.
This time, consumers may bear the brunt of the pain as rising inflation and sky-high energy prices boost daily living costs uncomfortably.
...
The question now: How bad will it get?
...
One potential scenario, built from precedent, recent corporate developments, economic indicators and interviews with economic and business experts:
- Consumers will continue to pull back, with troublesome results for retailers and companies. Housing prices, which have fallen an average of 8 percent nationwide and as much as 40 percent in some markets since peaking in 2005, will drop for another year or so.
- Unemployment could climb another two percentage points to 7 percent, which would be the highest in 16 years and leave another 3 million Americans out of work. And stocks could keep dropping.
...
Americans are clearly spooked by the current prospects of the economy.
Consumer confidence sank to the lowest level in at least six years this month, according to the RBC Cash Index, amid growing worries about jobs, energy bills and home foreclosures after the unemployment rate rose to a two-year high of 5 percent in December.
...
Consumer spending, which fuels a majority of the economy's output,
has slowed dramatically in recent months, as was evident in the unexpected 0.4 percent slump in December retail sales reported by the government on Jan. 15.
The article then goes on to say that the analysts have widely different levels of gloominess or optimism. So no real conclusion.