Cloudy Future -- Recession Is Forecast: The Duration Hinges On Political Decisions --- Businesses and Consumers Pull Back on Spending, As Confidence Is Shaken --- Shock to `American Psyche'
Corrections & Amplifications</br></br>THE BLUE CHIP ECONOMIC INDICATORS survey last week didn't cover the unemployment rate. A page-one article Friday, which said that the scenario painted by the Blue Chip forecasts would send the jobless rate toward 7%, incorrectly implied that the survey covered the unemployment rate. (WSJ Sept. 24, 2001)</br></br>Unable to fly home from a management huddle in Lake Tahoe, Nev., last week, a dozen executives of Park Place Entertainment Corp. commandeered one of the resort company's shuttle buses and drove to Las Vegas, with Chief Executive Tom Gallagher behind the wheel for much of the 500-mile trip.</br></br>Along the way, the executives made a critical decision: They shelved plans for a new $450 million, 900-suite luxury hotel tower for Caesars Palace in Las Vegas, a move announced publicly this week. "The thought was, let's keep our powder dry a little longer," says Mr. Gallagher. "The next few months are going to be rugged."</br></br>The nation's economy, already stalling prior to Sept. 11, is heading into recession. The consensus of forecasters surveyed Wednesday by Blue Chip Economic Indicators is that the recession will last through the end of this year. What happens then is in dispute. Three-quarters of the forecasters think the recession will be no worse than the mild 1990-91 downturn; a quarter think it will be worse.