My Blog

 Monday, November 03, 2008

Last Week in the News

On Monday, October 27, the Commerce Department reported that sales of new single-family homes rose by 2.7% in September to a seasonally adjusted annual rate of 464,000 homes. Economists had expected sales would drop from the August level.

Last week, the Treasury Department started recapitalizing nine major banks with $125 billion. The measure is designed to bolster the banks’ balance sheets so they will begin more normal lending practices. The action marks the first deployment of resources from the government’s $700 billion financial package passed by Congress on October 3.

On Tuesday, the Conference Board said the consumer confidence index, which had improved moderately in September, fell to an all-time low in October. The index now stands at 38, down from a revised 61.4 in September and significantly below analysts’ expectations of 52.

The Commerce Department reported Wednesday that orders for durable goods rose by 0.8%, surprising economists who had expected a decline. Orders had fallen by 5.5% in August, which was the biggest setback in nearly two years.

On Wednesday, the Federal Reserve slashed its key interest rate by half a percentage point to 1%. This is the interest banks charge on overnight loans. The funds rate has not been lower than 1% since 1958, when Dwight Eisenhower was president.

Gross domestic product — the total output of goods and services in the United States — decreased at an annual rate of 0.3% in the third quarter, the Commerce Department estimated Thursday. Domestic sales fell 1.8%, the biggest decline in 17 years. Consumer spending dropped 3.1%, the first decline in 17 years and the largest drop in 28 years.

Upcoming on the economic calendar are reports on factory orders on November 4 and the pending home sales index on November 7.