The only positive thing we heard today is the economy may hit bottom this year and stabilize. For now, we're feeling the strongest economic headwinds most of us can remember.
Consumer spending fell for the sixth straight month in December. For the year, consumer spending rose by just 3.6 percent.
Robert Crawford, an economist at the BYU Business School, says people are actually hurting the economy by not spending.
"That behavior, while prudent in the long-run perspective, is in fact making things worse," he said.
But he says saving is a good thing, especially for people who have unstable employment.
He also says an increase in spending by itself wouldn't be enough to reverse the recession. It's going to take businesses willing to invest. Consumer spending accounts for about 70 percent of total economic activity.
Americans worried about the possibility of more job cuts boosted their savings rate to 3.6 percent of their after-tax incomes in December. That was the highest level since tax rebate checks temporarily pushed the rate up to 4.8 percent in May.
A year ago, Utah led the nation in job growth. Now we're losing jobs. Construction is at its worst level since World War II, and sales tax revenue is dropping at a record pace, undermining government budgets.
To get money moving again, Wood says more rescue and stimulus bills are needed. He says, "You just have to hold your nose at this point. This is a crisis. This is a Pearl Harbor for the global and the U.S. economy. You know some of this is battlefield surgery, right now. We're just trying to stop the bleeding."
This article is found on KSL from February 2, 2009.
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