By Steve Schifferes
Economics reporter, BBC News
Economic woes dominated the US news this week - and have the potential to reshape the contours of the presidential race as it enters a crucial phase.
The dramatic intervention of the Federal Reserve, which made a big emergency cut in US interest rates, and the wild swings on world stock markets, mark a recognition by policymakers and investors alike that the US economy could be veering into recession.
In fact, most Americans believe the US has entered a recession already.
TOP ISSUES FACING THE COUNTRY
Economy/jobs: 24% (20%)
Iraq/war: 22% (25%)
Health care: 7% (7%)
Source: CBS/NYT poll, 9-12 January 2008 (December 2007), sample size 1,178
And since December, opinion polls have shown that the economy is seen as the most important issue facing the country - replacing Iraq, which topped the polls for the last few years.
This could have major effects on the prospects of the Republican and Democratic candidates running for the White House as they reach a key stage in the contest, with half the country voting in presidential primaries on 5 February.
Boost for Clinton?
Broadly, the emergence of the economy as the key issue could favour the campaign of Hillary Clinton over that of Barack Obama, and could help Mitt Romney, and to a lesser extent Mike Huckabee, at the expense of Republican rivals John McCain and Rudy Giuliani.
For Mrs Clinton, the economy has always been a strong point for her campaign. In the New Hampshire primary, Democratic voters who were most worried about the economy backed her by two to one over Mr Obama.
Mrs Clinton can appeal to voters on the basis of her husband's record in office, when the US economy grew strongly and created 20 million new jobs, and she has been quick to articulate a raft of policies to respond to the recession by stimulating the economy.
Mr Obama's unique selling point to Democratic voters has been his clear and unqualified opposition to the invasion of Iraq, in contrast to the prevarications of Mrs Clinton, who voted to support the war in 2002.
Mr Obama's message has had a particular appeal to younger, better educated voters who felt Iraq was the most important issue.
Older and less well-off voters, and women, have tended to be more concerned about the economy - and the growing signs of economic difficulty could mobilise them to get out and vote for Mrs Clinton.
Trouble for Giuliani?
When the race for the White House began, experience of foreign and security policy was seen as the key qualification for office, particularly on the Republican side.
So both Rudy Giuliani - the mayor of New York during 9/11, and John McCain, the former Navy flyer who was imprisoned during the Vietnam War - have made their experience of war and terrorism the centrepiece of their campaign.
But so far neither of them has articulated a clear economic policy that strikes a chord with voters.
Mr Giuliani has said that dealing with the recession is much like cutting the budget in New York City, while Mr McCain's admission that nothing can save the jobs of Detroit car workers did not go down well in the Michigan primary - which was won by Mr Romney.
By contrast, Mr Romney, who built a private sector consulting firm before going into politics, has made much of his experience of business and finance, and urged calm during the recent market turmoil.
He has also made the most direct claim to the economic legacy of Republican President Ronald Reagan, who led the US economy into recovery by freeing up the private sector and reducing taxes.
Mr Huckabee has less economic experience than Mr Romney, but his disparaging comments about Wall Street bankers and his plan to abolish income tax appeal to many Christian evangelical voters - his key supporters - who tend to be less well-off than other Republicans.
His lack of foreign policy experience becomes less of a problem for him as Iraq and Iran slip down the list of voters' concerns.
Populism is also taking root in the Democratic camp as the economic situation worsens.
In contrast to Bill Clinton, Hillary has been reluctant to endorse free trade deals, and has expressed doubt about sovereign wealth funds investing in the US - as have all other Democratic candidates.
Mr Romney derives one other potential advantage from the economic slowdown - in fundraising.
The long primary season has strained the finances of all the candidates, even those, like Hillary Clinton, who have raised more than $100m so far.
A recession may reduce the number of contributors to political campaigns, especially small donors. But Mr Romney is wealthy enough to finance his campaign himself.
Voting in November
The direction of the US economy for the rest of the year is still not certain.
But if the recession is longer than expected, it will almost certainly mean that Americans will be feeling less well-off by the time voting takes place in November.
If the economy is an even more salient issue, this could favour the Democrats in two ways.
First, the economic slowdown will have occurred on Mr Bush's watch, and inevitably the party in power is likely to get blamed - especially as the Democrats are likely to argue that failures of government regulation are responsible for the problems in the mortgage market.
In addition, economic woes could help cement the Democratic coalition by bringing out many less well-off voters who are normally far less likely to vote.
This could reverse the natural advantage usually enjoyed by the Republicans in that more of their supporters actually turn out at the polling booth.
And looking at some of the key swing states, it is clear that a number of them, in the Midwest (such as Ohio), the South-west (such as Arizona) and the South (Florida) are likely to be more heavily affected by the economic slowdown than others.
It is no surprise, then, that the Bush administration has been pushing so hard to reach a bipartisan deal to boost economic recovery.