Odds grow for recession, but lenders hold the key

Kevin G. Hall | McClatchy Newspapers

last updated: August 16, 2007 06:41:49 PM

WASHINGTON — Wall Street's woes are raising the risk that the U.S. economy could sink into recession late this year or early next year.

Although few economic analysts put the odds of recession at better than 50 percent, most are now upping their probabilities.

"We've lowered our 2008 growth forecast to 1.5 percent, down from 2.3 percent previously and 1.8 percent in 2007. We now expect a consumer recession, for the first time in 17 years," said a revised forecast issued Thursday by Merrill Lynch.