WASHINGTON — Even if the U.S. economy avoids sliding back into recession, the continuing weakness is inflicting long-term damage on many families and businesses that will make a full-blown recovery much harder to achieve.
The devastating recession that began in December 2007 struck a nation flying high on a housing boom and helium-inflated clouds of consumer spending. But the current slowdown is striking a nation already on its economic knees.
“That’s the danger right now: You’ve got an economy that didn’t recover,” said Ethan Harris, Bank of America’s chief economist for North America.
“We’ve had some healing,” he said, noting that banks are in better financial shape, as are some households.
“But the rehabilitation hasn’t been completed,” he said, and a relapse would be like “hitting an already-sick patient.”
Federal Reserve Chairman Ben Bernanke is expected to discuss the economic outlook today and the central bank’s role in the months ahead, but he is unlikely to announce any immediate policy changes despite widespread anticipation of new action.
And new numbers scheduled to be released today on overall economic growth are also not expected to brighten prospects.
What worries economists such as Harris is that an economy that shows little or no growth does more than inflict immediate pain. It inflicts damages and costs that will have lasting impact.
