Economists warn that Canadian businesses and investors should brace for the inevitable spillover as the U.S. grapples with a slowing economy and a growing fiscal hangover from years of excess.

Canada will still fair relatively better than the United States. But a slowdown in manufacturing and consumer spending here is now likely, and an uptick in unemployment and even some months of shrinking economic activity is not out of the question, argued David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc. in Toronto.

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