With forecasts that the US economy will either come perilously close to recession , or actually slip into recession, chief financial officers are increasingly gloomy about the prospects of the world's biggest economy.

According to the latest Duke University/CFO Magazine Business Outlook survey, the CFO gloom index has hit record levels. The big concerns are about feeble consumer demand, high labor costs and continuing market turmoil. And with more than a quarter saying they have been hit by all the credit market unrest, and with about six out of 10 saying credit has become more costly and one third saying it had become less available, it's clear that the impact of the subprime fallout has been wider than expected.

How will this affect the global economy? If it's a hard landing, it will send out damaging shockwaves. But if the downturn is drawn out over several months, it might have less impact because of the growth in developing economies, particularly China. Watch this space.