Oil Rout Threatens Vicious Cycle for Economy

If a lending slowdown "were to broaden out beyond just energy and mining, that would be a concern," Mr. Rosenberg said...

Economic gauges already indicate an industrial recession. The Federal Reserve reported this month that its index of industrial production had fallen 1.8% over the year ended December, a drop that has always been accompanied by a recession since the 1970s.

Even though the U.S. economy has grown far more focused on providing services than producing goods, it is more exposed to commodity-price declines because "a lot of the services conducted in our economy are done in support of produced materials," said Mr. Alpert. Ultimately, deflation in the goods sector could squeeze service providers, too.

... others worry shifts in the global economy have made the U.S. is less insulated today, which means models from the Fed and others may overemphasize domestic activity and inadequately capture cross-border spillovers.