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| Segment# |
| 1 |
| Location |
| |
| Date |
| 1/10/2008 |
| |
| Story Name |
| BRACING FOR RECESSION RECESSION FEARS |
| |
| Notes |
| |
| |
|LAKSHMAN ACHUTHAN, PROFESSOR KIT YARROW |
|18:30:53 |
|Prepared by The Transcription Company, , (818) 848-6500 |
|Which takes sole responsibility for accuracy of transcription |
|18:30:53 CHARLES GIBSON |
|(OC) Good evening. First, it was housing. Then, it was jobs. Now, |
|still another sign of economic troubles, rattled consumers seemingly too |
|scared to spend. |
|18:31:03 CHARLES GIBSON |
|(VO) Retailers today reported dismal December sales, the worst holiday |
|shopping season in five years. Macy's, JCPenney, the Gap, Target, all |
|down. |
|18:31:13 CHARLES GIBSON |
|(OC) Taking note of all this, Federal Reserve Chairman Ben Bernanke said |
|today the Federal Reserve is not forecasting a recession, but will, he |
|said, cut interest rates to prevent one. ABC's Betsy Stark is with me. |
|And Betsy, you don't often hear the Fed chair promising interest rate cuts |
|so publicly. |
|18:31:30 BETSY STARK, ABC NEWS |
|(OC) Charlie, it is unusual for the Fed chairman to send such a clear |
|signal. And what it tells us is that the Fed knows it may have to cut |
|interest rates more aggressively, at least half a point at the next |
|meeting, to help keep the country out of recession. While the Fed isn't |
|forecasting a recession yet, plenty of other forecasters are, and it would |
|hurt. |
|GRAPHICS: BRACING FOR RECESSION |
|18:31:53 BETSY STARK |
|(VO) No one's whispering about the R word anymore. Now, they just come |
|right out and say it. |
|GRAPHICS: RECESSION |
|18:31:58 ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN |
|The probabilities of a recession have moved up. |
|18:32:00 SENATOR HILLARY CLINTON, DEMOCRAT |
|Slipping toward a recession. |
|18:32:02 ECONOMIST, MALE |
|Risks of recession... |
|18:32:04 SENATOR HARRY REID, SENATE MAJORITY LEADER |
|America's looming recession. |
|18:32:05 MELISSA FRANCIS, CNBC REPORTER |
|The US economy will slip into recession this year. |
|18:32:08 BETSY STARK |
|(VO) The traditional definition of recession? |
|18:32:11 LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE |
|Usually, you see two negative quarters of GDP. |
|18:32:13 BETSY STARK |
|(VO) Marked by rising unemployment and a slowdown in consumer spending. |
|But if there is a recession, there will be no headline announcing when it |
|starts. |
|18:32:23 LAKSHMAN ACHUTHAN |
|We will not know when it started for a year or so after it's begun. |
|18:32:29 BETSY STARK |
|(VO) So if the experts won't know, how will you? Well, even if your |
|financial situation stays the same, you're likely to feel different if |
|people all around you are losing their jobs and their homes. |
|18:32:42 PROFESSOR KIT YARROW, CONSUMER PSYCHOLOGIST |
|It causes us to feel fear that we might lose what we have. |
|18:32:46 BETSY STARK |
|(VO) The fear is contagious no matter how wealthy you are. Low-income |
|consumers may fear they won't be able to fill up their gas tanks. |
|Middle-income consumers may fear their homes will be worth less than what |
|they paid for them. Upper income consumers may fear a falling stock |
|market will decimate their retirement funds. |
|18:33:06 PROFESSOR KIT YARROW |
|People are really anticipating a future that might be worse, which is |
|causing them to pull back now. |
|18:33:12 BETSY STARK |
|(VO) People we talked to today are already hunkering down. |
|18:33:16 CONSUMER, FEMALE |
|I always think twice before I buy something new. And now, I'm thinking |
|three and four times. |
|18:33:20 BETSY STARK |
|(VO) The pullback in spending sets a vicious cycle in motion. As |
|consumers spend less, sales fall, businesses cut production, many stop |
|hiring workers or lay them off, unemployment rises, incomes fall, and |
|consumers pull back some more. |
|18:33:36 CONSUMER |
|I was supposed to go out for dinner with a friend tonight, as a matter of |
|fact. And she called me and said, 'Could we eat in?" |
|18:33:42 BETSY STARK |
|(OC) You hear a lot of things like that in a recession. But keep in |
|mind, even if the numbers never add up to an official recession, things |
|can slow down so much that it still feels like a recession. In parts of |
|the country hit hard by the housing slump, it sure feels like a recession |
|already, Charlie. |
|18:33:58 CHARLES GIBSON |
|(OC) All right. Betsy Stark, reporting tonight. Thanks. |
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