A major issue to this economy, Swonk said, is the currentversion of an energy crisis. Prices for gasoline and heating fuelsare eating a higher share of household budgets. "That means formany, going to Target rather than Fields; renting DVDs rather thangoing to the theatre and ordering delivery rather than going out toeat," she said.

Swonk finds that with the housing market slowing down, therewill be less spending on residential investment. "Spending onhousehold items had been holding up the economy for quite a while.Refinancing has declining as well."

Swonk believes that there have been structural changes to theAmerican economy "that will make it harder for everyoneindividually to advance." She adds "We are now in an idea-basedeconomy rather than one based on manual labor." While reflecting oncorporate America, Swonk said that record profits have triggeredcorporate capital spending, which will go to energy-savingtechnology and energy efficiency.