An Economic Recovery No One Buys | csmonitor.com

The US economy enters 2003 in a peculiar pinch - with its growth prospects squeezed by excesses of the past and burdens of the future.

But don't try to persuade ordinary Americans - people who work, save in retirement accounts, and drive cars - that hard times are over.

"Households are finally facing up to the fact they are poorer for three years running," says Paul Kasriel, an economist at Northern Trust Co. in Chicago. Burdened with debt and shrunken investments, many consumers are starting to make a greater effort to save. The personal savings rate rose from 2.3 percent in 2001 to 3.9 percent in the first 11 months of 2002.

"If you want to retire before you expire, you have to save more," says Mr. Kasriel.

In addition to the stagnant stock market, many families aren't so sure that home values will rise as much as in the past.

As a market research analyst, I can say you will not get good forecasts until they have time to digest December performance. Lower interest rates have kept the housing and car markets up and military and security spending is benefiting some companies but everything else is very bleak.