WASHINGTON — Empty homes and for-sale signs clutter neighborhoods. You’ve lost your job or know someone who has. Your paycheck and nest egg are taking a hit.
Could the country be in recession? Sixty-one percent of the public believes the economy is suffering through its first recession since 2001, according to an Associated Press-Ipsos poll.
The fallout from a depressed housing market and a credit crunch caused the economy to nearly stall in the final three months of last year. Some experts, like the majority of people questioned in the poll, say the economy may be shrinking now. The worry is that consumers and businesses will hunker down further and pull back spending, sending the economy into a tailspin.
“Absolutely, we’re in a recession,” said Hilda Sanchez, 44, of Waterford, Calif. Squeezed by high energy and food bills, “we can’t afford the things that we normally buy,” she said.
For many, the meltdown in the housing and mortgage markets has proved especially disturbing. People have watched their single biggest asset fall in value, a reason to tighten the belt.
“Obviously, the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns,” President Bush said in a television interview aired Sunday.
For all of 2007, the economy grew by 2.2 percent. That was the weakest performance since 2002, when the country was struggling to recover from the last recession. The housing collapse was the biggest culprit in 2007. Builders lowered spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.
The job market is faltering — a point driven home by a report showing that employers cut jobs in January for the first time in more than four years.
Wall Street is unsettled, and as a result, people’s nest eggs are not what they once were. In fact, that was the top economic worry in the AP-Ipsos poll. Fifty-nine percent said they were worried “a lot” or “some” about seeing the value of stocks and retirement investments drop.
By one rough rule of thumb, a recession occurs when there are two consecutive quarters when the economy shrinks. The National Bureau of Economic Research, the recognized arbiter for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November.
The poll was based on the responses from 1,006 adults surveyed last week. Results had a margin of sampling error of plus or minus 3 percentage points.
