Business news for Sun, 23 Dec 2007 & with words economy+recession. 4 news.

CONSUMER spending in the United States rose more than forecast in November, allaying concern that the slowest shopping season in five years may have already pushed the economy into recession. Purchases gained 1.1 percent after a 0.4 percent increase in October that was more than previously estimated, the US Commerce Department said on Friday in Washington, according to Bloomberg News. Incomes also advanced, while the Federal Reserve's preferred measure of inflation accelerated. While the gain in November spending was the biggest in more than two years, it preceded reports by retailers that warned of a slump in purchases. A private report on Friday showed consumer confidence slid to the lowest level in more than two years in December. Economists forecast spending would rise 0.7 percent, after an originally reported 0.2 percent increase in October.

UNITED States 10-year Treasury note yields have risen to a three-day high on signs that central banks were adding enough funds to the financial system to spur bank lending. Ten-year notes fell on Friday by the most since December 12, paring a weekly advance, as central bank auctions of short-term loans totaling US$64 billion brought down bank-lending rates, fueling optimism the US economy will avoid a recession. Reports this week may show a slide in home prices is deepening. "As we move through 2008, we expect rates to move higher because consumers will prove resilient despite declines in housing, and growth will not fall off a cliff as the market is implying," Michael Pond, an interest-rate strategist in New York at Barclays Capital Inc, one of the 20 primary securities dealers that trade with the Federal Reserve, told Bloomberg News. Ten-year yields rose 12 basis points on Friday, or 0.12 percentage point, to 4.17 percent, according to bond broker Cantor Fitzgerald

By Nadeem Walayat. "The UK economy is being hit hard by the ongoing credit crunch with its sizable financial sector under strain and the UK housing market finally showing signs of the long anticipated downturn after one of the biggest bull runs in history."

Some economists predict the US economy will slide into recession next year. Others expect the nation to avoid recession, if only barely. A few even think the economy will see solid growth. But for many middle- and lower-income families, the distinction won't matter.