June 17, 2011
Does gathering gloom raise risk of double dip?
With recovery limping along, pessimism could begin weighing on growth
By John W. Schoen
Senior producer
msnbc.com msnbc.com
This month marks the second anniversary of an economic expansion that began at the end of what is now being called the Great Recession. But for millions of small businesses and households, the economic recovery has yet to arrive.
Frank Goodnight, owner of Diversified Graphics, a Salisbury, N.C., printing company with 12 employees, is among them. In 37 years, he has survived some tough economic times. But never like this.
"This recession is equal to the other four doubled,” he said. “Business has just been so bad for so long that right now we’re just hunkered down trying to survive.”
Consumer sentiment worsened more than expected in June on renewed concerns about the outlook for the economy, a survey released Friday showed . It was just the latest in a series of surveys that have pointed to a marked downward shift in the outlook for jobs, housing and the stock market.
Economists say the lingering effects of the Great Recession help explain why so many businesses, investors and consumers remain so gloomy about the outlook for the U.S. economy. The mood appears to be worsening, leading to a concern among economists and others of a self-fulfilling prophecy -- that worried consumers will slow spending, further hampering the recovery, and perhaps raising the risk of a double-dip recession or at least yielding years of sluggish growth.
"Even though the US will probably escape another recession, the inability and reluctance of households to spend will result in a number of years of sub-par economic growth," said Paul Dales, senior U.S. economist at Capital Economics.
Full story: http://www.msnbc.msn.com/id/43432796/ns/business-eye_on_the_economy/
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