At the center of that debate is the consumer.
Will consumers start spending again once they see signs of new life in the economy? Or are consumer balance sheets so underwater that it will take years for them to shake their newfound thrift?
The back-to-school shopping season could provide some answers.
Right now, the general consensus is that consumers will continue to feel pinched, so they'll hunt for discounts and focus on necessities. Still, some economists think that once the economy begins to pick up, consumers will open their wallets because of all the pent-up demand.
The forecasts are not robust. The National Retail Federation expects back-to-school spending to be down about 7.7 percent from last year. Other analysts are slightly more optimistic, but even the more bullish ones expect to see a challenging season.
From company sales reports and the Commerce Department's retail sales report, we know that the season has gotten off to a late start. That's partly due to the late Labor Day holiday, which has prompted many school districts to delay the start of the school year.
Some students plan to wait to go back to school to see what their peers are wearing before they buy their wardrobe. Also, some states have delayed tax holidays, and shoppers will wait because they don't want to miss out on the added savings those programs provide.
"If back-to-school sales don't materialize early, we believe retailers could become very promotional in an attempt to drive traffic and sales," said Citigroup analyst Deborah Weinswig, in a recent research report.
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According to Stacey Widlitz, a managing director at Pali Research, it shouldn't come as a surprise that consumers are shopping for items such as fall clothing later in the season.
"The department stores have trained us to wait for the discounts," she said.
But Widlitz also thinks consumers' frugal ways are here to stay.
"I think the one interesting thing about this environment is that it sort of forced the consumer to go out and say, 'Hey I’ve been overpaying, and if I actually open my eyes and look around, I can get great value,' whether that's my food, my clothes, or my handbag," Widlitz said. (To hear more from Widlitz, click here.)