Released: September 22, 2008

Can we dodge a recession?

Source: Barbara Hagenbaugh, USA TODAY

Business was already down at the Muddy Cup Coffee House this year. Now, Jim Svetz, owner of nine coffee shops in Upstate New York, fears things are only going to get worse.

Consumers “see the news, it’s big news, it ends up being on the major news channels, and then everyone becomes worried, and it affects their spending,” Svetz says. “It’s very tough out here.”

The U.S. economy has largely been resilient since the financial turmoil began more than a year ago, continuing to grow, albeit at a more subdued pace than in prior years. While some economists predicted the economy was headed for recession, others expected the USA would stay above water. But many economists think the latest chapter in the credit crunch saga, despite the government actions, will be too much for the economy to take, finally driving the USA into its first official downturn in seven years. Action by government in recent days may only soften the already heavy blow.

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