A foreclosure sign hangs in front of a home in Miami.
A foreclosure sign hangs in front of a home in Miami. - 
Listen To The Story
Marketplace

TEXT OF STORY

Doug Krizner: Investors were troubled by more signs of weakness for the economy. Marketplace's Steve Tripoli has that story.


Steve Tripoli: Layoffs surged in the financial sector, pending home sales fell by 12 percent -- economists had expected a 2 percent drop, and a major economic group said housing's a worse-than-expected drag on the economy.

The subprime crisis and housing woes are feeding on each other, says Wachovia Bank economic analyst Adam York.

Adam York: Subprime worries were what arguably sparked this last credit crisis. And the credit crisis in and of itself is creating problems for the housing market.

Now a wider spillover effect appears to be materializing, but York isn't pushing any panic buttons yet.

York: We don't think it's a doomsday scenario, we're not looking for a recession in the U.S. economy at this point. But we would certainly say that we think the impact is larger than we thought it would be a month ago.

York says tomorrow's employment report will be the next big indicator of how far housing and subprime misery is spreading.

I'm Steve Tripoli for Marketplace.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.