With The Recession Over, Where's The Growth?

Stock prices had one of their worst days in weeks Wednesday, in part because of a report that the trade deficit was worse than expected in June.

It's part of a series of disappointing reports that are leaving a lot of economists more pessimistic about growth.

Economists have been saying for nearly a year that the recession is over. These days, however, they're sounding a little less confident about what will happen over the next few months.

Two surveys released this week by Bloomberg and MarketWatch indicate that economists are lowering their growth projections for the second half of 2010.

Bloomberg said the median forecast has fallen from 2.8 percent to a little more than 2.5 percent. It was 3.7 percent during the first three months of the year.

Nariman Behravesh of IHS Global Insight says weak demand will hurt the economy between now and the end of the year.

"We have what might be called an epidemic of thrift," Behravesh explains. "Consumers are saving a lot, businesses are saving a lot and they're being very careful about their spending."

He says the weak job market is hurting demand, and a lot of businesses are reluctant to invest and hire. Behravesh says the surge in imports reported by the government Wednesday has lowered growth.

"It does mean that more of our growth in demand went overseas, so it's not going to help the economy very much," Behravesh says.

Most economists still believe the odds of a double-dip recession are slim, and that growth will continue but will be tepid until next year, when it should pick up — somewhat.

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