In a downward revision of last month's numbers, the Commerce Department reported this week that gross domestic product, the broadest measure of the economic vitality, increased at a 2.8 percent annual rate in the 2nd quarter of 2008. That's down half-a-percent from last month's estimate.
Meanwhile, orders for big-ticket manufactured goods fell nearly 5 percent in August, paced by a 38 percent plunge in orders for commercial aircraft and an 8 percent decline in demand for automobiles.
The slowdown is prompting many employers to cut back on hiring, pushing the nation's unemployment rate to a five-year high of 6 percent in August.
And on Thursday, JPMorgan agreed to buy the assets of Washington Mutual after the ailing thrift's assets were seized by the Federal Deposit Insurance Corporation in the largest bank failure in U.S. history.
The collapse capped a tumultuous week in which President Bush summoned congressional leaders and the two men fighting to succeed him, to the White House hoping to avert a national economic disaster. While much of the impact of the financial crisis has been confined to Wall Street, taxpayers also are concerned about its ramifications on Main Street.
Bob Young, American Farm Bureau Federation - "Agriculture is in strong financial condition. It did not go through this whole issue of sub-prime loans and things of that nature. Agriculture has had to have some pretty strong balance sheets to bring to the table for commercial banks, farm credit systems, or whatever to provide them with support. I think our balance sheet has looked extremely good for the most part."
Optimism aside, rural America is not immune to what is being called the worst financial crisis since the Great Depression.
One mortgage lender enduring Wall Street losses is the Federal Agricultural Mortgage Corporation, or Farmer Mac.
The organization was created by Congress in 1987 to improve the ability of agricultural lenders to provide credit to America's farmers, rural homeowners, businesses and communities. In recent reports, Farmer Mac revealed losses from bad investments in Fannie Mae and in bonds from the now- bankrupt Lehman Brothers, could drain an estimated $92 million from the lender's capital base. And some experts are concerned such losses could fuel a credit crunch in the agricultural sector.
Bob Young, American Farm Bureau Federation - "I think the sector itself, if I was going to lend money this is the sector I'd want to lend money to. But, for whatever reason if commercial lenders decide to tighten up or not lend at all, then we could be in for some real trouble."
In the case of Farmer Mac, tighter credit could have far-reaching implications throughout the rural economy. In addition to mortgages, Farmer Mac re-sells Farm Service Agency-guaranteed loans and finances rural electric and telephone cooperatives.
Farmer Mac funds its loan purchases by issuing debt or securities which it in turn sells into the capital markets. In this way, it facilitates the flow of money from Wall Street to rural America, thus providing a stable supply of credit to lenders and borrowers.
Bob Young, American Farm Bureau Federation - "You put crops in the ground in the spring; it takes the entire growing season for them to come out of the ground and then get harvested in the fall. You'll go at least 8, 9 10 to 12 months or so between the time you've made a decision and the time you have the financing lined up and the time you're ready to sell the crop so that's why financing is so important."