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Economy called OK if people still spend
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Contributor | Penguin |
Last Edited | Penguin Sep 17, 2006 11:33pm |
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Category | Analysis |
Media | Newspaper - Madison Capital Times |
News Date | Sunday, September 17, 2006 05:00:00 AM UTC0:0 |
Description | Will Americans keep up their healthy appetite to spend money?
That could determine whether the U.S. will head into a recession in 2007, Don Nichols, UW-Madison professor emeritus of economics and public affairs, told a conference at the Fluno Center on campus Friday.
The "big unknown" is how consumers will respond to falling home prices - a problem on the coasts but not in the Midwest - and high oil prices, Nichols said.
"If they cut spending 1 percent, we could tip into recession," he cautioned. "It's not the likelihood, but it's what I worry about."
Nichols said U.S. corporations, as a whole, are doing well, although the economy is slowing. Non-residential construction and business equipment spending are up and corporate profits are "enormous," he said.
"They have enormous capacity to invest, and if they do, it's going to keep us out of recession," he said. "There's no reason for corporations to chicken out at this time." |
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