"That is making them very cautious about investment decisions," he said.
In delivering the Federal Reserve's midyear economic report to Congress last week, Chairman Ben Bernanke sketched a bleak picture. And he warned that unless lawmakers strike a deal, the tax increases and deep spending cuts that will take effect Jan. 1 could trigger another U.S. recession.
Bernanke has said the Fed is prepared to take further action if unemployment stays high. He hasn't specified what steps it might take or whether any action is imminent.
The lackluster economy is also raising pressure on President Barack Obama in his re-election fight with Mitt Romney, the presumptive Republican presidential nominee.
But few think the Fed, the White House or Congress can or will do anything soon that might rejuvenate the economy quickly. Many lawmakers, for example, refuse to increase federal spending in light of historically large budget deficits.
"There is nothing out there to light a fire under the economy," said Joel Naroff, chief economist at Naroff Economic Advisors.
Copyright 2012 The A