“With the Federal Reserve cutting interest rates and Congress vowing to pass a large stimulus package, economists have said that the current downturn could end up being a short one,” writes David Leonhardt in today’s New York Times.

“The economic shock from the Sept. 11 terrorist attacks would make the slowdown worse, many analysts said, but the reaction would have the economy growing again by the start of next year.”

“That outcome has suddenly begun to appear less certain.”

“In recent days, a handful of economic indicators have been even weaker than expected, suggesting that a recovery could be difficult for policy makers to bring about quickly. Businesses continue to cut their spending, layoffs are still mounting and consumers are displaying growing signs of hesitation.”

“After the release of a new round of statistics yesterday, bond prices rose as investors bet that the Federal Reserve was now almost certain to lower its benchmark short-term interest rate by another half- point before the end of the year. Stocks fell broadly in the morning but recovered in the afternoon, with the Dow Jones industrial average closing up 117.28 points, or 1.25 percent, at 9,462.90.”

“The Commerce Department said yesterday that companies’ new orders for durable goods — typically expensive items that last at least three years — fell 8.5 percent in September, to $165.4 billion, their lowest level since 1996. Sales of existing homes, meanwhile, dropped 11.7 percent last month, the National Association of Realtors said yesterday.”

“The economy continues to suffer this month, too. Commodity prices, which reflect demand for raw materials, remain low. Jobless claims rose to 504,000 last week, climbing above 500,000 for the second time in recent weeks, the Labor Department said yesterday; the level had not previously been as high since 1992. “

“With every other large economy in the world struggling as well, the United States could have difficultly emerging from its slowdown in the coming months, according to a growing group of investors and analysts.”

” ‘We are in a global, synchronized recession,’ said Lakshman Achuthan, the managing director of the Economic Cycle Research Institute in New York. ‘Those are really hard to get out of,’ Mr. Achuthan added, because companies cannot shift their resources to economies that are still growing. The last recession to be so widespread occurred in the mid-1970’s and lasted for almost a year and a half.”