'Red warning lights' flash for global economy

LONDON (AP) - The global economy's problems seem to be multiplying.

Hours after the leaders of the world's 20 most developed economies sought to boost confidence by promising to increase global output by $2 trillion over five years, Japan said it had fallen into recession.

That leaves the country - the world's third-largest economy - on a long and growing list of troubled economies. China is slowing as well, and Europe can't seem to get going.

Among major economies, only the United States and Britain are growing at decent rates, and how long that lasts depends on how much trouble their trading partners have.

British Prime Minister David Cameron warned in an opinion piece in the Guardian newspaper on Monday that the "red warning lights are flashing" for the world economy.

One of those is the state of Japan's economy.

Prime Minister Shinzo Abe had pledged to end two decades of stagnation with a strategy dubbed "Abenomics" that included big economic reforms and stimulus. But the economy contracted at an annual pace of 1.6 percent in the third quarter after housing and business investment dropped following a sales tax increase.

The contraction came despite predictions the economy would rebound from a drop in the previous three months.

Consumer spending is faltering as the population shrinks and grows older. Household incomes peaked more than a decade ago, and workers are having trouble making ends meet with part-time or contract work.