The recession may have ended in June.
At least, that’s the earliest month that the economists at IHS Global Insight think the U.S. economy bottomed and began a slow recovery.
But the Lexington, Mass., firm reiterated on a conference call yesterday that the consumer is in bad shape and that poses a serious drag on economic growth.
“The consumer is the weak link in this recovery,” said Nigel Gault, its chief U.S. economist.
The federal “cash for clunkers” rebate program has succeeded in giving a temporary boost to sales of new cars and trucks, he said. But the program may have hurt other retail spending.
Consumer sentiment remains in recession territory, Gault said, and it has been moving sideways for a year.
All of that is to be expected given the massive loss of wealth suffered during the recession, the staggering debt load accumulated during the last expansion, the sharp decline in personal income, and the ongoing loss of jobs.
Only when employment begins growing again does Gault expect to see improvement in consumer spending, which drives about two-thirds of the U.S. economy.
When will that be? IHS Global Insight doesn’t expect to see employment growth until mid-2010.
Inside the lines
With the prime crayon years between 5 and 9, Crayola L.L.C. commands only a brief period of our lives before pens, pencils and keypads become our writing implements of choice.
Crayola has been trying to extend its hold on us with digital products, such as a Wii videogame and a digital camera scrapbooking kit.
But even as the Internet consumes more of our attention, Mike Perry, president and CEO of Crayola, said kids aren’t about to give up on those colorful sticks of wax.
“Something magical happens when a kid is able to pick up a crayon or marker and just simply create,” Perry said.
(See more from Perry on Thursday's webcast.)