Ok aside from the great source, I also wanted to post it due to the comment about income inequality because I truly believe this is why the fellas in NYC have really no idea what is happening in middle America.
Recession to Be Longer than Usual
- The U.S. economy has entered a recession that will be more painful and drawn out than the usual downturn, the director of the Reuters/University of Michigan consumer sentiment survey said on Friday.
- Inflation pressures will linger despite the retrenchment in consumer spending, complicating the task of policy-makers, the University's Richard Curtin said in a report, citing data from industry group The Conference Board.
- "This is no ordinary recession," he said. "The aftereffects will last much longer than the typical downturn."
- He said the Conference Board's expectations index is a strong predictor of economic contractions, and that it is currently flashing red. With Americans getting hit with everything from a housing downturn to excess borrowing, things will get worse before they get better.
- "Consumers must take more drastic steps to stabilize their finances in the midst of high fuel and food prices, stagnant incomes, and record debt," Curtin said.
- The new report adds that a rising wealth gap will, even more than usual, lead to disproportionate pain for middle- and lower-income Americans. "Growing income inequality has insulated higher income groups to a greater extent than ever before," the report said.
- Yet the rich will not go unscathed, with the stock market's recent slide likely taking a bite out of many an investment portfolio. (oooh, poor babies)
- Paradoxically, worsening economic conditions will induce families to save money, reinforcing the drag on an economy that has become largely reliant on consumer spending.
- "The negative impact will grow as home prices continue to fall in the year ahead," he said.
