U.S.: A Key Prop Under Demand Is In Danger
The U.S. stock market's volatility in recent weeks has focused attention on the outlook for economic growth--and rightfully so. Up to now, exceptionally supportive financial conditions, including both rising stock prices and falling long-term interest rates, along with the strongest job market in a generation, have been the power behind domestic demand. Spending by consumers and businesses has swamped the sizable drag coming from the financial meltdown outside the U.S. But now, market weakness threatens that crucial underpinning. And if U.S. demand cools off, the labor markets are sure to feel the chill.
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