Last Week In The News

On Monday, March 2, the Commerce Department reported that consumer spending rose more than expected in January after declining for a record six consecutive months. Consumer spending rose 0.6%, better than the 0.4% gain that economists expected. Consumer spending fell 1% in December 2008, after a 0.8% decline in November 2008.

Also on Monday, the Commerce Department reported total construction spending fell 3.3% in January, more than the 1.5% decline economists had expected. It was the fourth consecutive monthly decrease. Construction spending fell 1.4% in December.

On Tuesday, the National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, fell 7.7% to 80.4 in January.

The Institute for Supply Management reported the monthly index of manufacturing activity rose in February to 35.8 from January’s 35.6. Economists had expected a reading of 33.8. Figures below 50 indicate contraction, making February the 13th straight monthly decline in manufacturing.

On Thursday, the Labor Department said that productivity fell at an annual rate of 0.4% in the fourth quarter of 2008. That’s down from the 1.3% increase in the third quarter and 3.6% growth rate in the second quarter.

The Commerce Department reported factory orders declined by 1.9% in January. It was a record sixth straight drop but much less steep than the revised upward 4.9% in December and the revised upward 6.5% in November.

The personal savings rate rose to 5% in January, a 14-year high. But that was bad news for U.S. auto makers. At Ford sales fell 48.2% in February. Chrysler saw a 44% drop in sales in the month of February. And GM reported vehicle sales decreased 52.9% in February.
Upcoming on the economic calendar are reports on wholesale trade on March 10 and retail sales on March 12.

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