Retailers, home builders and many manufacturers should brace for even more rough times ahead, a somber Federal Reserve suggests amid growing fears that the US might be sliding into recession.
The Fed's snapshot of business conditions showed a national economy losing momentum heading into the new year and a future riddled with uncertainty. The persistent housing slump and harder-to-get credit are making people and businesses ever more cautious, it said.
Separately on Wednesday, the Labor Department reported that US consumer prices rose in 2007 at the fastest pace in 17 years in 2007, by 4.1 percent, as motorists paid a lot more for gasoline and grocery shoppers paid higher food bills.
Also, more big banks reported losses and said people were having trouble making payments for everything from credit cards to cars. Stocks were mostly down Wednesday, the Dow Jones industrial average declining 34.95 points, or 0.28 percent.
The Fed report was the unwelcome icing on a recent batch of economic indicators _ ranging from a plunge in retail sales to a big jump in unemployment _ raising concern that the country is heading for its first recession since 2001.
At the beginning of last year, many economists put the chance of a recession at less than 1-in-3; now an increasing number say 50-50 or even worse. Goldman Sachs, the biggest investment bank on Wall Street, thinks a recession is inevitable this year.
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