Greenspan: The risk of recession is rising

Former Federal Reserve Chairman Alan Greenspan said that the risk of a U.S. recession was increasing and that economic growth was "getting close to stall speed."

While it is too soon to say a recession is coming, "the odds are clearly rising," he said in an interview with National Public Radio broadcast yesterday.

The U.S. economic expansion, which began in 2001, is cooling after a third-quarter surge as the housing slump enters its third year and consumer spending slows. Martin Feldstein, head of the National Bureau of Economic Research, which is responsible for dating U.S. economic cycles, and former Treasury Secretary Lawrence Summers are among those who also have raised the prospect of a downturn.

Predictions that the six-year expansion is coming to an end have been countered by Allan Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh. Meltzer's case was strengthened Thursday by a Commerce Department report showing that retail sales rose 1.2 percent in November, twice as much as economists had predicted.

In the NPR interview, Greenspan said the economy's slow growth makes it especially susceptible to shocks.

"We are far more vulnerable at levels where growth is so slow than we would be otherwise," he said. "If somebody has an immune system that is not working very well, they are subject to all sorts of diseases."