Mike Niemira, senior economist at Bank of Tokyo-Mitsubishi in New York, said double-dips are tough on average workers who don't have enough time to recoup lost wages or win wage hikes. Even during the upswing, "it still feels pretty bad," he said.
A rare event
But Niemira and most other economists say the chances of a new double-dip recession are low because such events are rare. Aside from the Great Depression that spanned the 1930s, the only other double-header recession followed World War I.
The economy shrank from August, 1918, to March, 1919. It resumed growing then, only to slump again in 1920.
The optimists point to the good signs that also were released last week. In a separate report, the Commerce Department found that personal spending rose half a percent in June, while spending on big-ticket items -- goods that last three or more years -- rose 1.6 percent after a big slide the previous month.
The Bush administration's economic team is among the optimists. Lawrence Lindsey, director of the National Economic Council, appeared on CNBC on Wednesday to declare there is "good cause for optimism" because disposable personal income rose in the second quarter.
"The chances of a double-dipper are quite small," he said, predicting growth in 2002 to average as much as 3.5 percent.
Economists seem concerned about the possibility of a new recession, yet reasonably sure it won't happen, encouraged by stable prices, low interest rates and plenty of federal spending.
"I'm still thinking we can avoid the double dip," Cheney said. "There is enough momentum in government spending to keep the economy moving forward."
Kurt Karl, head of economic research for Swiss Re, a re-insurance company in New York, said that as long as consumers keep buying homes and other goods, the economy probably will stay positive. "Frankly, I don't expect a double dip," he said. "The consumer is not in too bad of shape for this point in the cycle."
But there are real risks, he said. Possible factors that he said could trip up the recovery: oil price shocks from a war in the Middle East; new terrorist attacks; a sharp drop in the dollar's value.
While lawmakers and Bush administration officials may debate what can be done to help the economy, economists generally say not much help can come from Washington now.
The Federal Reserve already has cut interest rates to very low levels, Congress has lowered taxes and increased spending, and President Bush last week gained the trade-promotion authority he said he needed to open new markets to US goods.
With all of that in place, Americans just need to be patient now, Cheney suggested.
"The economy is a supertanker; you can't steer it very much," Cheney said. "I think we just need to wait."
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