Economists’ view dims

WASHINGTON – Another recession isn’t likely over the next 12 months. Neither is any meaningful improvement in the economy.

That’s the picture that emerges from an Associated Press survey of leading economists who have grown more pessimistic in recent weeks. They say high unemployment and weak consumer spending will hold back the U.S. economy into 2012.

Worries that another recession is nearing and that the European debt crisis will spread have led to a roughly 15 percent drop in stock prices in the past month. Economists say the Great Recession ended in June 2009.

The fear gripping investors isn’t just a symptom of economic distress; it’s also a cause of it.

Each day that the stock market sinks “puts another nail in the coffin of the recovery,” said Beth Ann Bovino, senior economist at Standard & Poor’s.

“It was half-speed recovery; now, it’s a quarter-speed recovery,” Bovino said.

She is among 43 private, corporate and academic economists surveyed this month by the AP. As a group, they are more downbeat than when surveyed eight weeks ago. The economists do foresee economic growth, job creation, consumer spending and home prices all rising over the next year. But the gains they expect are so slight that many Americans won’t notice.

For months, the Fed and private economists had clung to the hope that a slowdown in the spring and early summer would prove temporary.

But the economy has kept worsening. The economy grew at an annual rate of just 0.8 percent in the first half of 2011 – much less than expected.

Europe’s intensifying debt crisis and Congress’ standoff over raising the debt ceiling undermined consumer confidence and spooked the markets. Consumers and investors foresee more gridlock ahead as a congressional committee seeks ways to cut at least $1.2 trillion in debt.

That means government spending, which normally helps economies, will likely instead restrain growth.