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12/29/05

Newsday.com: USA - Economic slowdown in 2006?

Newsday.com

USA - Economic slowdown in 2006?

For the past several years, the U.S. and regional economies have rested on the backs of consumers who kept buying houses, cars, computers and other gadgets, even when their wages weren't keeping up and jobs weren't plentiful. Now, all of that may change. Interest rates are rising, energy costs continue to pinch budgets and there's more concern than ever over debt levels and the lack of personal savings. More importantly, perhaps, the housing market likely has reached its top -- and 2006 may be the year it softens.

That adds up to a halt in exuberant consumer spending and the potential for far slower economic growth, unless more business spending kicks in. Virtually no one is predicting a recession in 2006 -- but many are predicting an economic slowdown. "2006 will be a little more dicey," said Martin Cantor, the director of economic development for Sustainable Long Island, an advocacy group. "If you don't consider the consumer tapped out, then I think you're misjudging or being too optimistic about economic growth."

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