Sunday, January 13, 2008

US economy facing 'recession'

Fri, 11 Jan 2008 11:31:16

US Central Bank
Vacancy rates at US regional malls rose and rents fell during the fourth quarter due to concerns about consumer spending and a potential slowdown in the national economy, real estate research firm Reis said.

A slowdown in both the growth of consumer spending and the hesitancy of retailers to sign leases in such uncertain times has contributed to a change in trajectory for regional malls, Reis chief economist Sam Chandran said.

”Those sources of consumer cash, such as re-financings and home equity loans have dried up in the housing downturn," he added.

US Federal Reserve chief Ben Bernanke said "that the baseline for real activity in 2008 has worsened and the downside risks to growth have become more pronounced".

The US is facing the twin threats of how to tackle a slowing housing market and lower consumer spending while at the same time addressing inflation as oil and food prices rise.

His comments in Washington come after leading investment banks warned that the US was heading for a recession.

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