Inching Towards a Recession

March 28, 8:52 am ET By Martin Crutsinger, AP Economics Writer

Consumer Spending Posts Weakest Gain in 17 Months in February

WASHINGTON (AP) -- Consumers, jolted by a credit crisis, job cuts and soaring energy costs, turned in the weakest spending performance in 17 months in February, further evidence that the risks of a recession are increasing.

The Commerce Department said Friday that consumer spending edged up by just 0.1 percent last month, the poorest showing since September 2006. And if the effects of inflation are removed, spending was flat in February, the third consecutive month of sluggish activity.

The performance of the consumer is closely watched since consumer spending accounts for two-thirds of total economic activity. Economists said the sustained weakness in this area is one of the most worrisome signs that the economy could be tipping into a recession.

The prolonged slump in housing, rising job layoffs, soaring energy costs and a severe credit crisis are taking their toll on consumer confidence. All of these troubles are causing consumers to cut back on their purchases.

http://biz.yahoo.com/ap/080328/economy.html

Signs of A Recession
1. Consumer spending increased just .1% in February, the worst in 17 months
a- if inflation was removed, the spending was flat
b- consumer spending accounts for 2/3's of total economic activity
2. Housing Slump
3. Rise in job layoffs
a- consumers cut jobs for a second consecutive month in February
4. Increasing energy costs
5. Credit Crisis
6. Fed aggressively cutting interest rates
7. The mere fact that the Government has issued an Economic Stimulus Package