More recession fears as US economy nearly stalls in 4Q

Source: Exec Digital USA

Date :1/30/2008 10:28:34 AM

The Commerce Department's latest report on the nation’s GDP has showed that the economy’s fourth quarter growth rate was just 0.6 percent, its worst year since 2002.

The report, released today, showed that the slowing housing market and the tightening credit market had a serious affect on business and consumer spending, prompting more fears of a recession.

In 2007, the economy grew by just 2.2 percent, the lowest in five years, when the country was struggling to recover from the 2001 recession. The housing collapse dealt the economy its biggest blow last year. Builders slashed spending on housing projects by 16.9 percent on an annualized basis, the most in 25 years.

’Perfect storm’

"The economy has been subject to something of the perfect storm here. It has been hit by the housing slump the credit squeeze, the subprime slime and stock price declines on Wall Street," said economist Ken Mayland, president of ClearView Economics.

"The economy is weathering some pretty stormy seas but it is weak."

Some analysts think the economy is on pace to recede from January through March. Under one rough rule, the economy would have to contract for six months in a row for the country is considered to be in a recession. The odds of a recession have risen sharply over the last year, and analysts increasingly believe the U.S. will be in one during the first half of this year.

January 30, 2008