(02-10) 07:34 PST WASHINGTON (AP) —

Empty homes and for-sale signs clutter neighborhoods. You’ve lost your job or know someone who has. Your paycheck and nest egg are taking a hit. Could the country be in recession?

Sixty-one percent of the public believes the economy is now suffering through its first recession since 2001, according to an Associated Press-Ipsos poll.

The fallout from a depressed housing market and a credit crunch nearly caused the economy to stall in the final three months of last year. Some experts, like the majority of people questioned in the poll, say the economy actually may be shrinking now. The worry is that consumers and businesses will hunker down further and pull back spending, sending the economy into a tailspin.

“Absolutely, we’re in a recession,” said Hilda Sanchez, 44, of Waterford, Calif.

Squeezed by high energy and food bills, “we can’t afford the things that we normally buy,” she said. “We are cutting corners in our spending. For our groceries, we are buying a lot of generic and we are eating out less.”

For many, the meltdown in the housing and mortgage markets has proved especially disturbing. Record numbers of people were forced from their homes, unable to afford the monthly loan payments. People watched their single biggest asset fall in value, a reason to tighten the belt.

“Obviously the housing market is creating deep concern. And one of the real problems could be that if people, as a result of their value of their homes going down, kind of pull in their horns,” President Bush said in a television interview aired Sunday.

Credit has become harder to get, thwarting would-be home buyers, adding to the glut of unsold homes and aggravating the housing industry’s woes.

“For-sale signs are everywhere. In my area, 35 to 40 homes are standing there and aren’t even complete. There aren’t any buyers,” said Jim Sims, 60, of Greer, S.C.

Nanette Dahlin, 52, of St. Louis Park, Minn., called the situation “very scary.” She said friends in Madison, Minn., put their home up for sale recently and reduced the asking price more than $100,000 in just a week. “They are in bad shape,” Dahlin said.

For all of 2007, the economy grew by just 2.2 percent. That was the weakest performance since 2002, when the country was struggling to recover from the last recession. The housing collapse was the biggest culprit in 2007. Builders lowered spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.

The job market is faltering Д a point driven home by a report showing that employers cut jobs in January for the first time in more than four years.

“The way things are, people are afraid of losing their jobs,” Sanchez said.

Employment concerns are contributing to darker feelings about the economy and people’s own financial well-being. Consumer confidence, as measured by the RBC Cash Index, dropped to a mark of 48.5 in early February. It was the worst reading since the index began in 2002.

A cooling job market along with high energy and food prices are taking a toll on paychecks. Workers’ average weekly earnings, adjusted for inflation, fell 0.9 percent last year. In 2006, earnings grew by a solid 2.1 percent.

Wall Street is unsettled and as a result, people’s nest eggs are not what they once were.

In fact, that was the top economic worry in the AP-Ipsos poll. Fifty-nine percent said they were worried “a lot” or “some” about seeing the value of stocks and retirement investments drop.

“I really dread opening my (financial) statements,” Sims said.

By one rough rule of thumb, a recession occurs when there are two consecutive quarters Д six straight months Д when the economy shrinks. That did not happen in the last recession, though. The economy contracted in the first quarter of 2001, turned positive in the second quarter, shrank in the third quarter and turned up again in the final quarter of that year.

The National Bureau of Economic Research, the recognized arbiters for dating recessions, uses a more complicated formula. It takes into account such things as employment and income growth. By that measure, the last recession was in 2001, starting in March and ending in November.

Bush, citing some experts, said the U.S. was not in a recession, although he acknowledged “that the signs are troubling enough” to justify the $168 billion economic rescue plan that passed Congress this past week. The measure he intends to sign on Wednesday includes tax rebates for people and tax breaks for businesses.

To bolster the economy, the Federal Reserve embarked on a rate-cutting campaign in September, with two big reductions last month. In just eight days in January, the Fed slashed rates by 1.25 percentage points. The hope it that the lower rates will induce people to buy more and revive the economy.

So if the poll figure of 61 percent is right Д that the country is now in recession Д then those relief efforts will help ease the effect of a downturn.

“People are both depressed and anxious about the state of affairs. The anxiety is going to persist because we are in an uncertain season economically and politically,” said Terry Connelly, dean of Golden Gate University’s Ageno School of Business.

TOKYO: Rick Wagoner, the chief executive of General Motors, boasts about the number of markets where the U.S. automaker is No. 1. Toyota Motors president, Katsuaki Watanabe, emphasizes where his company trails.

Listening to the leaders of the worlds biggest carmakers, you might think Toyota was the one playing catch-up.

Yet, though GM begs to differ, Toyota has been ahead for the past two years. In 2007, the Japanese group sold about half a million more vehicles than GM, after excluding cars from a Chinese company in which the American firm holds only a minority stake.

The gap may very well widen this year as Toyota seeks growth in emerging markets. So why does Toyotas 65-year-old chief sound so worried?

“Im constantly trying to drive home the message that long-lasting success is elusive,” Watanabe said recently. “Our corporate DNA is about always challenging ourselves to do better. The moment we let down our guard, the fall could come very fast.”

Failure is not normally a word associated with an auto company that is in a league of its own. For years, Toyota has led the industry by nearly every corporate yardstick: profit, market value and cash reserves. Outselling GM, which held the No. 1 spot for the previous 75 years, was largely a symbolic milestone.

But as Toyota began adding roughly half a million cars a year to its output and extended its reach, it has faced new problems. Vehicle recalls have hit record levels in recent years, and Toyota has slipped in quality rankings.

That has not helped the companys share price, which has fallen by around 20 percent in the past six months because of fears of a slowdown in the key U.S. auto market.

The snags have yet to slow Toyotas sales. The company expects to sell almost twice as many cars this year as it did a decade ago.

To keep up with soaring sales, Toyota has doubled its work force to 310,000 over the same period, and that is where Watanabes quality headaches have come from.

A visit to a Toyota plant in Japan shows how difficult it is for Toyota to maintain its high standards as it moves production offshore to booming markets and hires new workers.

At the Tsutsumi factory, the home of Toyotas Prius hybrid car, elderly workers move components around at a speed that encapsulates Japans unique work-centric culture.

The pace of work picks up across the factory floor every time overhead displays are updated with the days vehicle quota, reflecting in real time new orders received at dealerships.

In Japan, death from overwork is not uncommon - Toyota itself was blamed for one in a lawsuit last year - but expecting that level of dedication elsewhere is far from realistic.

“With the population declining and aging in Japan, Toyota has no choice but to expand its work force abroad,” said Tsuyoshi Mochimaru, an auto analyst at Lehman Brothers. “This is a major challenge for management. Its not easy to translate the Toyota Way outside of Japan.”

Instilling a sense of urgency is also tough when new hires have never known a Toyota that was not a cash-generating machine.

Unlike Watanabe. He joined Toyota straight out of university in 1965 and has been with the company through some of its toughest years, including the U.S.-Japan trade disputes of the 1980s and the crippling effects on Japanese exporters as the dollar traded at 79 in the mid-90s.

Even with Toyotas recent quality problems, conveying to the rank and file the dangers of complacency is a tall order.

That is why, from the moment he took the helm in 2005, Watanabe has made it his mission to discourage employees from measuring Toyota against rivals but rather against a lofty goal: developing a dream car that “cleans the air, doesnt cause accidents, makes drivers healthier and can go around the world on one tank of fuel.”

“We have a long way to go,” he said.

It sounds like a corporate fantasy, but the culture of striving is ingrained in Toyotas origin, which can be traced back to the Great Kanto Earthquake of 1923. The quake leveled Tokyo and destroyed trains and streetcars, the citys primary means of transport in a country that was still an industrial backwater.

Sakichi Toyoda, an inventor of textile looms, lamented Japans need to import Ford trucks to bus people around after the quake and instructed his son, Kiichiro, to build automobiles to serve the country.

In less than 70 years, Toyota Motor went from being a tiny spin-off of a textile loom maker to the worlds biggest automaker, guided by a culture of “kaizen,” or continuous improvement and a tireless effort to eliminate waste.

As the Japanese automaker grows, top managers face the challenge of preventing what it calls “big-company disease,” characterized by complacency and murky responsibilities as its workforce of 310,000 expands.

The following are some quotes from past and current leaders at Toyota, and the “Toyoda Precepts”: five guiding principles drafted in the 1930s by those close to the founder, Sakichi Toyoda, who started out as a maker of textile looms.

Kiichiro Toyoda, Sakichis son and the second president of Toyota Motor, said after design plans for a loom were stolen from his fathers firm: “The thieves may be able to follow the design plans and produce a loom. But we are modifying and improving our looms every day.”

“They do not have the expertise gained from the failures it took to produce the original,” Kiichiro Toyoda said. “We need not be concerned. We need only continue as always, making our improvements.”

Eiji Toyoda, the fifth president and a nephew of Sakichi Toyoda, said at a 1984 news conference with General Motors to announce a joint venture factory in California: “We consider GM our primary competitor and hope to work hard in healthy competition with the company as the best of rivals.”

Hiroshi Okuda, senior adviser and eighth president, said in 1997: “We wish to make Toyota not only strong, but a universally admired company, winning the trust and respect of the world. We must be a company that is accepted wholeheartedly by people around the world, who would think it natural if Toyota became No.1 in size, since we provide attractive products that excel in environmental protection and in safety.”

Katsuaki Watanabe, current president of Toyota, likes to quote Japanese proverbs. On the elusive nature of long-lasting success, he said “the pitcher goes so often to the well that it is broken at last.”

Another proverb often heard from Watanabe as a warning against complacency is “even the sturdiest of dikes is destroyed by an ant hole.”

The Toyoda Precepts

1. Be contributive to the development and welfare of the country by working together, regardless of position, in faithfully fulfilling your duties.

2. Be ahead of the times through endless creativity, inquisitiveness and pursuit of improvement.

3. Be practical and avoid frivolity.

4. Be kind and generous; strive to create a warm, homelike atmosphere.

5. Be reverent, and show gratitude for things great and small in thought and deed.