US economy faces slow growth

At a slow pace the U.S. economy grew in the late fall.

Photo: US economy faces slow growth

The Fed Reserve's new snapshot, released Wednesday, suggested that the strains from a severe housing slump and a painful credit crunch are affecting the behavior of individuals and businesses alike - making them somewhat more cautious.

The Fed's new snapshot suggested that the strains from a severe housing slump and a painful credit crunch are affecting the behavior of individuals and businesses alike - making them somewhat more cautious.

"Reports on retail spending were downbeat in general," the Fed survey said. "Most retailers said that they were expecting a slow holiday season, with only small gains in sales volumes compared with last year," the Fed added.

Spending by consumers and businesses is the lifeblood of the country's economic activity. The big worry for economists is that consumers and businesses will cut back on spending and investing, dealing a blow to economic growth. The odds of a recession have grown this year. Still, Fed officials and many other economists remain hopeful the country will weather the financial storm without falling into recession.