Penny Pinching May Linger Long After Recession

Risk of recession at 26%; unemployment likely 9% at year's end

(NEWSER) - Despite a bombardment of bad news in recent weeks, economists don’t expect another recession over the next 12 months—but economic growth will barely be perceptible in that period, an AP poll of top economists finds. They expect high unemployment and weak consumer spending to dog the US into next year. Overall, the outlook is poorer than it was in June: That month, the 43 economists surveyed saw a 15% chance of double-dip recession; now, they report a 26% chance. More»

Could devastate a still-ailing economy, writes Catherine Rampell

(NEWSER) - Economists say we could be headed for a second recession—and if they’re right, it’s poised to be even more devastating than the first, writes Catherine Rampell in the New York Times . That’s because the starting point for the second dip would be our current weak economy, and this time, policymakers have little room to fix things. Consumers don't have much fat to cut, either—they did that already—meaning families would have to "cut from the bone." More»

Economy grew just 1.3% over past three months

(NEWSER) - We already knew the Great Recession was the worst in decades, but in fact we were even worse off than we thought, new figures show. The economy shrank 5.1% over the course of the recession, from 2007 to 2009—1 percentage point worse than the earlier estimate of 4.1%, the AP reports. Only two in the past 10 recessions saw a squeeze of more than 3%. And yes, the economy is now growing—but it expanded only 1.3% from April to June, the Commerce Department said, lower than expected. More»

With no consumer spending, economy keeps dragging

(NEWSER) - There are plenty of theories and explanations for the economic crisis that has afflicted the United States for years now, but they all miss the element of the continuing malaise—it's really about the bursting of the decades-long consumer spending bubble, writes David Leonhardt in the New York Times . "Discretionary service spending" (think education and entertainment) has never fallen more than 3% in a recession in decades—in this recession, it has fallen 7%. "If you’re looking for one overarching explanation for the still-terrible job market, it is this great consumer bust," says Leonhardt. More»

Forecast fastest expansion in years on consumer spending

(NEWSER) - Economists are growing more optimistic about this year’s climate, predicting it will expand at its fastest pace since 2003, the Wall Street Journal reports. The paper polled 51 economists. Among the highlights:

• Economists see only a 12% risk of returning to recession, compared to 22% in September.
• In the 4th quarter of 2011, economists expect GDP to be 3.5% higher than a year before—beating last month’s prediction of a 3.3% increase.