As interest rates rise and currency controls are put in place to prevent further deterioration, analysts fear an international credit crunch will exacerbate the already fragile situation. The United States' strong economy could protect it from global turmoil. Watching world events cautiously behind Uncle Sam's impressive economic umbrella, investors blamed slumps on irrational market behavior. Since the Russian debacle however, US giant banks have announced huge losses. America's Federal Reserve Chairman Alan Greenspan has been increasingly somber about the risks that global financial turmoil poses for the United States but downplayed the prospect of an economic recession.
Recent indicators do however point to an economic slowdown.
According to the Labor Department's monthly employment survey, the number of non-farm workers rose by 69,000 in September, marking a sharp decline from an average monthly increase of 245,000 for the first half of 1998. Consumer confidence is also reported to be down amid tighter commercial bank lending standards and decreasing corporate profits. Asia's Problems Japan's economic recession is deep. Japanese exports have also been badly hurt by the Asian crisis. 1998 GDP growth forecast is -2 percent.