LA Times: Economic fears rise as disappointing figures pile up

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Economic fears rise as disappointing figures pile up
Most economists still think the U.S. will avoid a double-dip recession, but a long malaise seems likelier.

By Walter Hamilton and P.J. Huffstutter, Los Angeles Times
August 14, 2010


The U.S. economy and stock market ended one of the grimmer weeks of the year, as disappointing retail sales figures released Friday combined with other dismal data to heighten fears that the nation's nascent recovery is stalling.

The retail report, which came only days after the Federal Reserve announced a new effort to prop up the economy, fueled growing concern that the U.S. is in danger of falling into a double-dip recession.

Rising anxiety was apparent worldwide this week. U.S. unemployment claims ticked up. The Chinese economy, a steady consumer of U.S. and global exports, showed signs of cooling. The Bank of England cut its economic growth estimates for Britain through next year, citing planned government budget cuts to reduce deficit spending. And investors huddled into the perceived safety of U.S. Treasury bonds even as yields skidded to a 16-month low.

Most economists believe a dip back into recession — as well as an equally debilitating bout of deflation, or broadly falling prices — will be avoided. But many have nonetheless warned that the prospects are rising, and say the more probable scenario isn't much more appealing: a protracted economic malaise with imperceptible growth and stubbornly high joblessness.

"We are mired in a jobless recovery:eyes:, and the government has run out of ammunition to help out the economy," said Sung Won Sohn, an economics professor at Cal State Channel Islands. "The current situation doesn't look very good." ..........(more)

The complete piece is at: http://www.latimes.com/business/la-fi-economy-20100814,0,1233477.story