U.S. Economic Recovery 'Delayed Rather Than Derailed'

ByJohn S. McClenahen The U.S. economy is likely to contract this calendar quarter and next, meeting the operating, if not official, definition of recession. "Anything really related to consumer spending is going to see a bit of a hit here for the next couple of months," says Richard Nash, chief market strategist at Victory Capital Management, an asset management subsidiary of KeyCorp., Cleveland. But what he describes as the good news is the prospect of a V-shaped recovery beginning in mid-2002. "You're going to have a pretty nice stimulus package hitting the economy in mid-2002 most likely," he says. In that package so far are eight interest-rate cuts totaling 350 basis points from the Federal Reserve. And, Nash notes, there are prospects for additional federal tax cuts and post-terrorist-attack federal aid to New York City, Washington, and the U.S. airline industry. "We do think the economic recovery has been more delayed than derailed," states Nash.