AILING GLOBAL ECONOMY COULD DELAY RATE HIKE

WASHINGTON— Just as the U. S. job market has finally strengthened, the Federal Reserve now confronts a new worry: A sputtering global economy that’s spooked investors across the world.

The economic slump could spill into the United States, potentially weakening job growth and keeping inflation well below the Fed’s target rate. Such fear has led some analysts to suggest that the Fed might wait until deep into next year to start raising interest rates — and then raise them more gradually than expected.

“I’m beginning to think that the Fed might delay,” said Bob Baur, chief economist at Principal Global Advisors, an asset management firm. “If we don’t see a better situation in Europe and better things out of Japan and stability in China, they might hang on just a little bit longer.”

Yet so far, the prospect of continued lower rates is being outweighed by investors’ mounting fears. The Dow Jones industrial average is now more than 5 percent below its September peak.

The Fed’s vice chair has publicly acknowledged that the turmoil abroad could lead the Fed to act more cautiously.

“If foreign growth is weaker than anticipated, the consequences for the U. S. economy could lead the Fed to ( raise rates) more slowly than otherwise,” Vice Chair Stanley Fischer said in a speech last weekend.

Fischer’s remarks followed a rash of data last week that pointed to slower growth worldwide. Germany reported sharp declines in factory output and exports. China’s expansion has slowed, and consumers in Japan are still spending listlessly.