03/28/2008 02:46 am ET Updated May 25, 2011

Not-So-Happy Leap Day: Economic News Goes From Bad To Worse

As if investors didn't have enough to worry about, Friday's batch of economic numbers shows more signs of recession as well as its evil twin--inflation.

First, the government reported that U.S. consumer spending rose more than expected in January, but the gain was eaten up by swiftly rising prices.

Then, a Chicago-based business group said U.S. Midwest business activity contracted sharply in February, showing that even areas of the country least affected by the boom-bust housing cycle are feeling ripples from the crisis.

On top of that, U.S. consumer sentiment dropped to a 16-year low in February, hitting levels that usually sound the alarm bells of recession, on worries about declining incomes and rising unemployment, a survey showed.

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Need Further Proof? Look no further than today's headlines:

- Dow slips over 300 points
- Oil hits $103 a barrel
- Consumer spending stalls
- AIG, the country's largest insurer, posts a $5.3 billion loss