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News > Economy
Recession fears high
September 21, 2001: 11:15 a.m. ET

Survey: Consumers fear attacks will spur recession, but spending won't change
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NEW YORK (CNNfn) - Nearly half of all Americans believe last week's terrorist attacks will push the United States into a recession, according to a new survey by a private research organization, but the vast majority of those surveyed don't plan to change their spending habits.

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The survey of 750 U.S. households, conducted Sept. 18 and 19 by the Conference Board, found 47 percent of consumers think the tragedy will tip the economy into recession, compared with 53 percent who do not.

"While nearly 90 percent of consumers say they will not cut back on their buying plans, it's important to note that this figure is very likely to fall as widespread layoffs begin to materialize," said Lynn Franco, director of The Conference Board's Consumer Research Center.

Economists are worried that consumers will sharply rein in spending after the Sept. 11 attacks that destroyed the World Trade Center, damaged the Pentagon in New York and caused the crash of an airliner in Pennsylvania, killing thousands. A drop in consumer spending, which fuels two-thirds of the U.S. economy, could cause the already sluggish economy to slip into a recession.

Many companies especially airlines have begun to announce job cuts as they gird themselves for a pronounced downturn in wake of the attacks.

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Surprisingly, nearly 70 percent of those surveyed said they would not cancel air travel plans after the attacks, despite anecdotal evidence that a great number of travelers are canceling flights. The attacks involved the hijacking of passenger airliners, which were used as weapons against civilian targets.

The Conference Board, which is known for its monthly consumer confidence survey, an economic indicator closely monitored by the Federal Reserve and Wall Street, said it will conduct a follow-up survey next month.

The Fed has cut its target for short-term interest rates eight times this year to boost consumer confidence and spending and avoid a recession, and it is likely to do so again at or before its next policy meeting, scheduled for Oct. 2. graphic

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