Wall Street Sneezes; Heartland Catches Cold

Worries about a recession are hitting home with Americans
By Jim O'Neill,  Newser User
Posted Mar 21, 2008 11:36 AM CDT
Graphic charts monthly unemployment rate for the past 13 months and past five years.   (AP Photo)
camera-icon View 4 more images

(Newser) – The high-profile economic woes plaguing Wall Street and previously hot housing markets are spreading, raising the possibility of the worst recession Americans have faced in years. The New York Times crisscrosses the country, assembling anecdotal evidence—suddenly thrifty brides, unsold construction equipment, sinking earnings at FedEx—that suggests the slowdown could drag into 2009.

Especially worrisome are projections that show consumer spending dropping 1% drop in the first quarter. "That's a wow," says one economist. "Outright declines for real consumer purchases are unusual." Weighing a 6% drop in fourth-quarter home sales, more than 127,000 jobs lost since Jan. 1, and a steep drop in consumer confidence, “it’s not hard to construct very dark scenarios, primarily because the financial system is in disarray,” said another analyst.