Many consumers expect recession
U.S. Capitol Building
TEXT OF STORY
Scott Jagow: Now, I'm afraid, I have to be the party pooper. The Fed's rate cut will not solve everyone's problems. Construction of new homes fell in August to the slowest pace in 12 years. There are still a lot of home foreclosures coming.
The housing market will be soft for a while. In fact, a poll out today from Reuters and Zogby International finds that most people think a recession is coming, and soon. Steve Henn reports.
Steve Henn: Americans are feeling the most pessimistic about the housing market. Seventy-five percent say they expected home prices to stay flat or fall next year.
But this wouldn't be America if we didn't point the finger. So I hit the streets of D.C. this morning to ask commuters who they blame for the real-estate mess:
Henn: The government?
Woman: The government, yeah. I think Greenspan, he may have had something to do with it.
And then, there are borrowers.
Woman: Yeah, they bear most of the responsibility.
In the Reuters poll, 43 percent of Americans blamed banks. As this commuter put it, financial institutions:
Man: Enhance people to try to take mortgages that they can't afford. And that's been a big problem.
But no matter who's responsible for our current funk, American's mood isn't a good sign. Consumer spending drives two-thirds of the economy. And if our collective bad mood causes us to close our wallets, that recession one-third of Americans say they're afraid of could become a reality.
In Washington, I'm Steve Henn for Marketplace.