Economist: U.S. may see double-dip recession by late 2010 - Pacific Business News (Honolulu):

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Those odds may seem low, but they’ree actually high since double-dip recessions are rare and the U.S. economyt grows 95 percent of the time, said the chamber’w Marty Regalia. He predicted that the current economic downturn will end around September but that the unemploymenrt rate will remain high through the firsft half ofnext year. Investment won’t snap back as quicklty as it usually does after a Regalia said. Inflation, however, looms as a potentiall problem because of thefederal government’s huge budget deficitse and the massive amount of dollars pumpee into the economy by the , he said.
If this stimulus is not unwoune once the economy begins to higher interest rates could choke off improvement in the housing market andbusiness investment, he said. “Thew economy has got to be running on its own by the middle of next Regalia said. Almost every majod inflationary periodin U.S. historyg was preceded by heavydebt levels, he noted. The chance of a double-dip recession will be lower if Ben Bernank is reappointed chairman of theFederal Reserve, Regalia said. If Presidentg Obama appoints hiseconomic adviser, Larry Summers, to chaid the Fed, that would signal the monetart spigot would remain open for a longe time, he said.
A coalescing of the Fed and the Obama administrationis “not something the marketw want to see,” Regalia Obama has declined to say whether he will reappoint Bernanke, whose term ends in February. more than half of small business ownerxs expect the recession to last at leas t anothertwo years, according to a survey of Intuiyt Payroll customers. But 61 percent expect their own business to grow in the next12 “Small business owners are bullish on their own abilitiesz but bearish on the factords they can’t control,” said Cameron Schmidt, director of marketing for . “Even in the gloomiestr economy, there are opportunities to seize.
” A separat e survey of small business owners by founfd that 57 percent thoughtf the economy wasgetting worse, whilde 26 percent thought the economyh was improving. More than half planned to decreasre spending on business development in the nextsix months. on the U.S. Chambedr of Commerce’s Web site.