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8/15/07

Globe and Mail: World Economic trends: Economist warns of consumer-led recession - by Barrie McKenna

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World Economic trends: Economist warns of consumer-led recession - by Barrie McKenna

The U.S. economy may be on the brink of its first consumer-led recession in nearly two decades, according to Merrill Lynch economist David Rosenberg. "There are plenty of signs now suggesting that we may be in the early stages of a consumer-led recession for the first time in 17 years," Mr. Rosenberg warned in a report to clients. "The future is very likely in the hands of the consumer on Main Street, USA, and the latest signposts are not encouraging."

He and other economists point to several alarm bells for the world's largest economy: Banks are tightening consumer lending standards, auto sales have slumped to a nine-year low and key retailers keep missing their sales and profit targets.

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