US 'spending binge' to end as housing market slows

business-times.asia1.com.sg :

Morgan Stanley chief economist Stephen Roach has said that US consumer spending is the 'weakest link' in the global economy and will fade this year as the housing market slows. 'This is the year to watch out for the end of the great American spending binge,' Mr Roach said at the World Economic Forum (WEF) annual meeting. 'The property bubble is nearing its end.'

After expanding 4.1 per cent in the third quarter of last year, consumer spending advanced just 0.4 per cent in the subsequent three months amid higher interest rates and lower house prices, according to the median forecast of 13 economists surveyed by Bloomberg News. Sales of previously owned homes fell in December for a third straight month, the longest streak since 2002, an industry report was expected to show yesterday, according to another survey.

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