How far down will housing drag us?
Three key indicators popped onto economic radar screens yesterday and none of them brought good news. The credit and housing crises are starting to impact the larger economy, but are we on the steep road to recession? Steve Tripoli reads the signs.
A foreclosure sign hangs in front of a home in Miami. (Getty Images)
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Doug Krizner: Investors were troubled by more signs of weakness for the economy. Marketplace's Steve Tripoli has that story.
Steve Tripoli: Layoffs surged in the financial sector, pending home sales fell by 12 percent -- economists had expected a 2 percent drop, and a major economic group said housing's a worse-than-expected drag on the economy.
The subprime crisis and housing woes are feeding on each other, says Wachovia Bank economic analyst Adam York.
Adam York: Subprime worries were what arguably sparked this last credit crisis. And the credit crisis in and of itself is creating problems for the housing market.
Now a wider spillover effect appears to be materializing, but York isn't pushing any panic buttons yet.
York: We don't think it's a doomsday scenario, we're not looking for a recession in the U.S. economy at this point. But we would certainly say that we think the impact is larger than we thought it would be a month ago.
York says tomorrow's employment report will be the next big indicator of how far housing and subprime misery is spreading.
I'm Steve Tripoli for Marketplace.
