U.S. Households Face 'Perfect Storm'

Most economists believe that the crisis on Wall Street will push the U.S. into a full-blown recession later this year. With credit markets seizing up, it has become difficult for businesses, as well as state and local governments, to borrow money to fund operations. Many Americans’ retirement savings have been severely dented by falling stock prices. Slightly more than 750,000 jobs have been lost since the start of the year and the rate of losses increased from an average of 75,000 a month to 159,000 in September. The combination of lost housing and equity wealth, lost jobs, lost access to credit and still high petrol prices adds up to what Richard Berner, the co-head of global economics at Morgan Stanley, calls a “perfect storm” for US households.