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Economists say no double-dip recession, but still not optimistic

by Jorge Hernandez on August 23, 2011

After the stock market took a nosedive in early August, there were rampant fears about the United States entering another recession much like the one that began in 2008. However, the Associated Press reports that a new survey of economists shows that they don't see the country heading down that road, at least not in the next 12 months.

Specifically, the survey polled 43 private, corporate and academic economists. What it found was that they believe the likelihood of a recession in the next year is about 26 percent and that the economy will see a 2.2 percent growth between October and December.

While the findings may quell the fears of a double-dip recession, they were certainly not optimistic. The AP survey also showed that many economists believe high unemployment, and thus weak consumer spending, will hold back the economy at least until the beginning of next year.

The markets are stuck in a vicious cycle. Consumers and businesses are scared by falling stock prices, so they spend less, and as a result, investors respond by lowering stock prices, thus continuing the market's struggles.

The housing market has been perhaps the biggest indicator of the economy's struggles to rebuild itself. The decline in home prices have cost consumers about $7 trillion since 2005, and many are saving up money as they try to recover.

"We need to see some job creation," Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness, told the news source. "Until then, consumers are trying to put nest eggs that turned into Humpty Dumpty back together again."

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