Aug. 29, 2009 AUSTIN, Tex. (New York Times) -- Even as evidence mounts that the Great Recession has finally released its chokehold on the American economy, experts worry that the recovery may be weak, stymied by consumers’ reluctance to spend.
Given that consumer spending has in recent years accounted for 70 percent of the nation’s economic activity, a marginal shrinking could significantly depress demand for goods and services, discouraging businesses from hiring more workers.
Millions of Americans spent years tapping credit cards, stock portfolios and once-rising home values to spend in excess of their incomes and now lack the wherewithal to carry on. Those who still have the means feel pressure to conserve, fearful about layoffs, the stock market and real estate prices.
“We’re at an inflection point with respect to the American consumer,” said Mark Zandi, chief economist at Moody’srecession, and who provided data supporting sustained weakness. Economy .com, who correctly forecast a dip in spending heading into the