For now, the much-ballyhooed M&A recovery remains all talk.

Through Oct. 29, the dollar volume of announced world-wide merger and acquisitions was down 42% from September, according to data provider Dealogic. That made it the slowest month of the year. In the U.S., activity fell 46% from September, according to Dealogic.

Those numbers mark a bad start to a quarter that many believed would mark the beginning of the recovery. M&A professionals for months have been talking about how much busier they were, and that rewards for their efforts would be seen in final quarter of the year.

Instead, the retreat provides another example of how deeply the financial crisis has affected the economy and the fits and starts it will experience on the road to recovery.

Credit continues to be tight. And while confidence has increased in boardrooms and corner offices, executives remain cautious. Uncertainty about the direction of economy and the stock market–not to mention unease about Washington’s involvement in the economy–is keeping companies on the M&A sidelines.

Yet no matter the