MarketWatch: When a recovery feels like a recession

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By Kathleen Madigan


NEW YORK (MarketWatch) -- It's getting scary again.

After some improvement in the data over the spring and early summer, the recent news is describing an economy growing below 2%. While technically not a double-dip recession, the recovery could be so weak it will feel like another downturn.

That is because sub-2% growth in real gross domestic product won't reverse any of the drags on the economy -- and it will threaten a main support to recent growth: capital spending.

In a 2% economy, job seekers won't find much work, workers won't get big pay raises. Financial markets will stay on pins and needles. Policymakers will remain stymied and politicians will rant.

To be sure, those trends sound familiar. The new twist is that Wednesday's data suggest the cloudy outlook is curtailing spending on business equipment. New orders for non-defense capital goods excluding aircraft plunged 8.0% in July, wiping out the gains of the previous two months. Read more about the data.

If new bookings fall again in August, be afraid. ...........(more)

The complete piece is at: http://www.marketwatch.com/story/the-recovery-will-feel-like-a-recession-2010-08-26?dist=beforebell