A Recession That's Mild But Long?

It might be deeper than the downturns of 1990 and 2001 but still gentler than the postwar average—thanks to bold policy actions, falling inflation, and early inventory adjustments The financial crisis is rapidly moving beyond Wall Street. Frozen credit markets pose a serious threat to the welfare of consumers and businesses—and not just in the U.S. The crisis is now officially global, as evidenced by the unprecedented coordination by major central banks on Oct. 8 to cut interest rates by a half-point. In the U.S., recent reports suggest the economy hit an air pocket last month: Job losses accelerated to a five-year high, and the nation's purchasing managers said manufacturing activity plunged to a seven-year low. Many economists believe a recession of some depth and duration is unavoidable in the wake of the latest sharp... [read full story]