Why the economy stinks

Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, offers a pretty good summary during a speech she's giving today:

While we are likely now in a period of recovery, it doesn't really feel much like one. All types of businesses are continuing to see weak levels of demand - in other words, they don't expect to see a bounce-back in sales for quite a while yet. This in turn creates excess capacity, which leaves businesses having to decide whether to maintain or shut idle plants and offices. In such an environment, firms are being cautious about new hiring and so unemployment persists at a high level, which in turn restrains spending.