It is too soon to put a simple label on the 2001 recession. In many industries and in many regions, including the Midwest, the recession is not even over. And even though the national economy seems to be over the hump, it will take some time before we get enough accurate, detailed information on what proved to be the once-bulletproof economy's undoing.

But if we had to come up with a moniker for the 2001 recession so far, it would be the "corporate" recession. Yes, there have been job losses and plant closings, particularly in Midwestern states like Indiana. But as painful as those cutbacks have been, they pale in comparison to the bloodletting that has been taking place on corporate balance sheets.

The fact that all businesses, not just corporations, have had a hard time making a buck lately has reverberated throughout the entire economy.

The most obvious place it's been felt, of course, is on Wall Street. The collapse of stock prices from their lofty heights of only two years ago can only partially be blamed on sagging profits, but they are certainly a big part of the story. Lower stock prices make it harder for companies to raise new capital, and through the wealth effect put a damper on consumer spending. They have also cost state tax collectors billions of dollars in the revenue they had grown accustomed to raising from taxing capital gains.

The direct impact on state tax collections, through taxation of corporate profits, has been catastrophic. In the fourth quarter of 2001, state tax receipts from corporate income taxes were down 31.5 percent nationally, and by 12.4 percent in Indiana.

More importantly for the overall economy, however, has been the impact of weak profits on business spending. Like a multi-headed hydra, the cutbacks in business spending have taken a bite out of a wide range of economic activities, from corporate philanthropy, to spending on advertising and research, and to investment in plant and equipment. Airlines are hurting because businesses have stopped buying full fare tickets. United Way campaigns are having a hard time meeting goals. Even corporate lobbyists are running out of money.

The first quarter of 2002 marked the sixth consecutive quarter in which business spending on equipment had fallen. Last summer, that spending was falling at double-digit rates. Indeed, the fact that spending only fell at a 2.3 percent rate during the first three months of this year is seen as a sign of hope for the economy. By contrast, consumer spending has never failed to grow in the entire recession, and as recently as last winter posted a blistering 6.1 percent growth rate.

In a roundabout way, weak business profits have also produced a result you normally wouldn't associate with low levels of spending on plant and equipment, namely, big gains in productivity. Weak profits have made businesses try to squeeze more out of their existing labor force, as many workers can attest. Those efforts helped produce a surprisingly high 8.3 percent rise in business productivity in the first quarter of the year.

But the long-standing difficulty in accurately measuring hours worked, particularly among salaried employees, make gains of that magnitude suspicious. If more such employees reported actual hours, instead of their nominal workweek, the reported gains in output per hour might fall back to earth.

What's keeping profits down? That's a harder question to answer in a sound bite. Suffice it to say that the same low-inflation, highly competitive environment that's been so kind to consumers has been decidedly less so for American companies. And until business bottom lines start healing, there will be cause for concern in our economy.