Retail Sales in Record Fall

Sales at U.S. retailers suffered a record decline in October as fears of recession sapped spending, but part of the drop was due to slumping gasoline prices which helped buoy consumer confidence.

The Commerce Department said on Friday that retail sales slumped 2.8 percent in October to a seasonally adjusted $363.7 billion, the largest decline since the department's current methodology was adopted in 1992, as mounting unemployment hit shoppers' appetites.

Holiday Sales to Fall, First Decrease in 23 Years

U.S. holiday retail sales will fall 1 percent this year, according to America's Research Group, marking the first time the research firm has forecast a decline in almost a quarter century of surveys.

"This year looks so bad that even normally good signs for retail sales, such as more Americans staying home this Christmas, can't save the season for retailers," said C. Britt Beemer, CEO and founder of the research group, in a news release.

Fed Approves American Express Bank Conversion

The company has posted four straight declines in quarterly profit and lost about half its market value this year as it set aside funds for soured credit-card debt. American Express makes loans to consumers, exposing it to defaults fueled by more than 700,000 U.S. job losses this year, unlike Visa Inc., which processes payments and said yesterday that quarterly adjusted earnings doubled to $448 million.

U.S. Jobless Rate Climbs, Reaches 14-Year High

The U.S. unemployment rate rose to the highest level since 1994 as companies slashed payrolls, setting the stage for the steepest economic decline in decades and a tough start for Barack Obama's presidency.

The jobless rate rose to 6.5 percent in October from 6.1 percent the previous month, the Labor Department reported today in Washington. Employers fired 240,000 workers after a loss of 284,000 in September. Revisions to the previous month added 25,000 more to the jobless lines than previously reported.

GM & Ford Q-3 Losses Worse Than Expected

General Motors Corp and Ford Motor Co reported far deeper-than-expected quarterly losses on Friday and said their rate of cash burn had accelerated, as an extended slump in car sales raised questions about the future of the U.S. auto industry.

Both companies said they would take aggressive steps to cut their costs even further. The two largest U.S. automakers reported third-quarter results after the world's No. 1 automaker, Toyota Motor Corp of Japan, slashed its profit forecast for the year.

US Manufacturing Activity Falls To 26-year Low

A key index of the nation's manufacturing activity fell to a 26-year low, sliding into recession territory, according to a purchasing managers group.

The Institute for Supply Management's (ISM) said Monday that its manufacturing index tumbled to 38.9 in October from 43.5 in September. It was the lowest reading since September 1982, when the index registered 38.8.

Economists were expecting a reading of 42, according to a survey conducted by Briefing.com.

U.S. GDP Contracts .03%

The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter century and boosting the chances of Barack Obama and his fellow Democrats in next week's elections.

Gross domestic product contracted at a 0.3 percent annual pace, less than forecast, a Commerce Department report showed today in Washington. The last major economic data before the election also showed that a record two-decade consumer spending boom ended last quarter as the credit crunch deepened.

Stocks Face Worldwide Recession Fears

Stocks tumbled Friday, although they managed to close off session lows, as Wall Street joined a worldwide market slump on bets that a recession is imminent - if not already in place.

According to early tallies, the Dow Jones industrial average fell 312 points or 3.6%.

The Dow slumped as much as 504 points in the morning, but came back to within 112 points of breakeven in the final hours before falling back again.

The Standard & Poor's 500 index fell 3.5% and the Nasdaq composite slid 3.2%. All three indexes closed at fresh five-year lows.

U.S. Retail Sales Report "Simply Disturbing"

Economists say the results of the U.S. retail sales report were worse than already pessimistic expectations, and will put consumer spending on the path to shrinking for the first time since 1991."We have a recession on our hands," said Jennifer Lee, economist at BMO Capital Markets, who noted the 1.2% drop in the headline is the worst monthly fall since June 2004.

Dow Hits 5-year Low After Fed Action

Wall Street's drubbing continued Tuesday, with a 500-point loss bringing the Dow's two-day slump to nearly 900 points, as the Federal Reserve's plan to loosen credit markets failed to temper investor pessimism.

Fed Chairman Ben Bernanke's dour economic outlook in an afternoon speech added to the day's weakness. And a report showed consumer borrowing in August fell for the first time since January 1998.

The Dow Jones industrial average lost 508 points or 5.1%, closing at the lowest point since Sept. 30, 2003.

Bush Signs Bailout Plan

October 3, 2008

After two weeks of contentious and often emotional debate, the federal government's far-reaching and historic plan to bail out the nation's financial system was signed into law by President Bush on Friday afternoon.

"By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said less than an hour after the House voted 263 to 171 to pass the bill.

Run on Bank Helped Kill Washington Mutual

Bush Warns Of Serious Risks to U.S. Economy

President George W. Bush warned on Wednesday that the United States was in the middle of a serious financial crisis that could push the economy into a long-term recession if the government did not act.

In a televised address aimed at persuading the public to support a $700 billion financial bailout being negotiated with Congress, Bush said his "natural instinct" was to oppose government intervention in the financial sector, but the financial turmoil called for a different approach.

Bailout Plan Expanded With Automotive & Student Debt

September 23, 2008

In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks.

The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.

New Home Sales Fall to 17-year Low

September 25, 2008

The pace of new home sales fell to its lowest level in 17 years in August, according to a key government report released Thursday that signaled more dismal news for the housing sector in coming months.

August sales came in at a seasonally adjusted annual rate of 460,000, the Census Bureau report showed, down 11.5% from a revised 520,000 in July. The reading was well below the consensus forecast of 513,000, according to economists surveyed by Briefing.com.

Bank Of America Aquires Merrill Lynch Financial

Sept 15, 2008

NEW YORK (Reuters) - Bank of America Corp's $50 billion acquisition of Merrill Lynch & Co Inc marks the end of a storied name in American finance, but also creates the nation's biggest bank by far.

The purchase would end the 94-year independence of Merrill, Wall Street's third-largest bank, and pair it with a banking behemoth that has announced more than $150 billion of acquisitions in the last five years. Bank of America would pass Citigroup Inc, the largest bank by assets, in size.

U.S. Government Assumes Control of Fannie & Freddie

September 7th, 2008

(Bloomberg) - The U.S. government seized control of Fannie Mae and Freddie Mac after the biggest surge in mortgage defaults in at least three decades threatened to topple the companies making up almost half the U.S. home-loan market.

Auto Industry Seeks $50B in Loans From Congress

Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

Industry officials said the loans, which are twice the amount authorized in last year's energy bill, are a top priority when Congress returns next month because of the declining fortunes of Detroit's automakers and tightening credit markets.

Home Building 17-Year Low

Housing building fell sharply in July to a 17-year low, a government report issued Tuesday showed.

Starts plunged 11% to an annual rate of 965,000 from a revised 1.084 million pace in June, according to the Census Bureau report. Economists surveyed by Briefing.com had forecast starts would fall to a rate of 960,000.

Permits - often seen as a sign of builders' confidence in the housing market - tumbled 17% to an annual rate of 937,000 from a revised 1.138 million in June. Economists had forecast that permits would come in at 959,000.

US Inflation Rising at Fastest Pace in 17 Years

The Labor Department reported Thursday that consumer prices rose by 0.8 percent last month, twice the 0.4 percent gain that economists had been expecting.

Homeowners Suffering From Huge Sell Losses

More homeowners than ever are selling at a loss, propelling the real estate market deeper into crisis.

In the 12 months that ended June 30, nearly 25% of all homes sold nationwide fetched less than sellers originally paid, according to real estate Web site Zillow.com.

While the nation's double-digit decline in home prices has been well documented, the new report underscores the economic force of those price declines. Homeowners are walking away with much less in their pocket when they sell. And that affects more than the real estate market.

U.S. Budget Deficit Triples to $102.8 Billion

2008-08-12

WASHINGTON - The federal budget deficit soared in July, pushed higher by economic stimulus payments and $15 billion in outlays to protect depositors at failed banks.

Worker Productivity Slows

WASHINGTON (AP) -- The efficiency of America's workers grew at a slightly slower pace in the spring as companies sought to produce more with leaner work forces. Workers' compensation growth slowed, too.

The Labor Department reported Friday that productivity - the amount an employee produces for every hour on the job - grew at a rate of 2.2% during the April-to-June quarter. That was down from a 2.6% growth rate logged in the first three months of this year.

Federal Reserve Concludes Economic Woes Continue into 2009

WASHINGTON: Federal policy makers have reached a consensus that the turmoil plaguing the housing and financial markets is likely to spill deep into 2009, becoming one of the most significant domestic problems to confront the next president when he steps into the Oval Office in Jan.

Federal Reserve Leaves Interest Rates Unchanged

WASHINGTON - The Federal Reserve, caught between mounting job losses and rising inflation, decided to sit tight and hope that the interest rate cuts it has already provided will be enough to heal a sick economy.