It all adds up to a series of hard knocks for Asia, and the bumpier the landing in the U.S., the more bruising the impact on the region. A flurry of discouraging U.S. economic news in the past few weeks is providing plenty of fodder for those who doubt the high-flying American economy can navigate a soft landing. They predict a double whammy of weakening U.S. consumer and corporate appetite for Asian exports, particularly in the all-important electronics industry. Consumer spending in October recorded the smallest gain in a half year. This means the red-hot pace of American corporate investment, particularly in information technology, is likely to cool.
Many economists see more darkness on the horizon.
If joblessness continues to rise, consumer confidence could get further walloped. The day before, Federal Reserve Chairman Alan Greenspan signalled that he may consider lowering interest rates in coming months. Many economists are rooting for action sooner rather than later. With the U.S. economy cooling, the technology industry so crucial to Asia is getting roughed up the most. The PC has been dead in the water.