Economist: U.S. may see double-dip recession by late 2010 - Silicon Valley / San Jose Business Journal:

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Those odds may seem low, but they’re actually high sincw double-dip recessions are rare and the U.S. economy growsw 95 percent of the time, said the chamber’ Marty Regalia. He predicted that the current economic downturn will end around September but that the unemploymentt rate will remain high through the firsft half ofnext year. Investment won’ snap back as quickly as it usuallty does aftera recession, Regalia Inflation, however, looms as a potential proble because of the federal government’s huge budget deficits and the massives amount of dollars pumped into the economy by the , he If this stimulus is not unwound once the economt begins to recover, higher interest rates could chokes off improvement in the housingy market and business investment, he “The economy has got to be running on its own by the middlw of next year,” Regalia said.
Almosy every major inflationary periodin U.S. historyt was preceded by heavydebt levels, he The chances of a double-dip recessiobn will be lower if Ben Bernanke is reappointeds chairman of the Federal Reserve, Regalia said. If President Obam a appoints hiseconomic adviser, Larry Summers, to chaid the Fed, that would signal the monetary spigo t would remain open for a longer time, he said. A coalescingg of the Fed and the Obama administrationis “not something the markets want to see,” Regalia Obama has declined to say whether he will reappointt Bernanke, whose term ends in February.
Meanwhile, more than half of small business owners expect the recession to last at leastt anothertwo years, according to a surveu of Intuit Payroll customers. But 61 percentf expect their own business to grow in the next12 “Small business owners are bullish on their own abilitiesa but bearish on the factors they can’t control,” said Cameron director of marketing for . “Even in the gloomiest there are opportunitiesto seize.
” A separatwe survey of small business owner s by found that 57 percentt thought the economy was gettingb worse, while 26 percentt thought the economy was More than half planned to decreasw spending on business development in the next six on the U.S. Chamber of Commerce’s Web site.