70% of the US economy was consumer spending. Cars and groceries and clothes and appliances, restaurant meals, amusement park tickets, home renovations, boats and RV's, sporting goods. Trouble is, buying this stuff can be postponed. You can always squeeze another year out of the old car, wear old clothes a little longer, do without a new flatscreen as long as the old CRT still works.
Today, any consumer with two brain cells firing has to be worried about losing his/her job. With that hanging over them, the rational reaction is save money and don't buy everything except groceries. So consumer spending is down, a lot. And will stay down until the consumers feel a little safer in their jobs. With 70% of the economy on vacation, demand is down, and manufacturers are not hiring. Which makes people fear for their jobs all the more. It's a vicious circle. The last time this happened, it took World War II to snap us out of it. Nobody wants to do World War III just to restore full employment in the US.
Just watched Meet the Press, with Allan Greenspan, Mayor Bloomberg, Ed Rendel, and some others. No one mentioned this, not even Greenspan who used to be a pretty sharp Fed chairman.
We are in trouble until our leadership figures out what makes the US economy tick.