G.O.O.D

Source: Bloomberg.com

The decline in U.S. manufacturing deepened in December as demand for such products as cars, appliances and furniture reached the lowest level since at least 1948, signaling further cutbacks in factory jobs and production this year.

The Institute for Supply Management’s factory index fell to 32.4, below economists’ forecasts and the lowest level since 1980, from 36.2 the prior month. Readings less than 50 signal contraction. The group’s new-orders measure reached the lowest level on record and prices slid the most since 1949.

“Every component suggests that the weakness is going to carry over into 2009,” Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina, said in a Bloomberg Television interview. “There’s just not a whole lot of new business coming in,” and companies will have a “painful adjustment” as consumers shun spending.

Today’s figures underscore that, with private demand collapsing, manufacturers’ best hope for new business this year may be President-elect Barack Obama’s plans for an unprecedented stimulus package. Obama has pledged an investment program in roads, schools and the U.S. energy network akin to the 1950s- era interstate highway construction boom.

Stocks advanced on the first day of trading in 2009, following the biggest annual drop for the Standard & Poor’s 500 Index in 71 years, on expectations government stimulus efforts will curtail the recession. The S&P index rose 1.4 percent to 916.16 at 11:08 a.m. in New York. Benchmark 10-year Treasury yields rose to 2.25 percent from 2.22 percent late Dec. 31.

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Source: money.cnn.com

A key measure of consumer confidence fell to an all-time low in December amid a dismal job market and uncertain outlook for the new year.

The Conference Board, a New York-based business research group, said Tuesday that its Consumer Confidence Index fell to 38 in December, down from 44.7 in November.

Economists were expecting the index to increase to 45.5, according to a Briefing.com consensus survey of economists.

The gloomy news came at the end of a full year of recession. The credit crunch has strained the financial system as central banks struggle to raise capital.

At the same time, housing prices have plunged and S&P 500 has plummeted more than 40%. The dollar has been weak against major currencies. This year’s holiday retail season is predicted to have been the worst in decades.

Perhaps most unsettling for Americans is the deteriorating job market. Layoffs and income cuts were widespread this year. The number of Americans filing for first-time unemployment benefits rose to a 26-year high for the week ended Dec. 20.

Nearly 2 million jobs were lost in 2008, and the slumped stock market means some nest eggs have shrunk considerably.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.

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Source:  Reuters

Prices of U.S. single-family homes in October plunged a record 18.0 percent from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indices released on Tuesday that indicated a U.S. housing market in the throes of a deep recession.

The composite index of 20 metropolitan areas fell 2.2 percent in October from September. The price drops, both on a year-over-year and month-over-month basis, came in worse than expectations based on a Reuters survey of economists.

S&P said its composite index of 10 metropolitan areas declined 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.

“The bear market continues; home prices are back to their March, 2004 levels.” David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said in a statement.

Source: MarketWatch

Home prices in 20 major U.S. cities dropped 2.2% in October from the prior month, and had fallen a record 18% from the previous year, according to the Case-Shiller home price index published Tuesday by Standard & Poor’s. Prices have fallen in all 20 cities compared with last month and a year ago, and 14 of the 20 metro areas showed record rates of annual declines. For the original 10-city index, prices fell a record 19.1% in the previous 12 months.

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Source: Reuters

Retailers’ sales fell as much as 4 percent during the holiday season, as the weak economy and bad weather created one of the worst holiday shopping climates in modern times, according to data released on Thursday by SpendingPulse.

The figures, from the retail data service of MasterCard Advisors, show the 2008 holiday shopping season was the weakest in decades, as U.S. consumers cut spending as they confront a yearlong recession, mounting job losses and tighter credit.

“It’s probably one of the most challenging holiday seasons we’ve ever had in modern times,” said Michael McNamara, vice president of Research and Analysis at MasterCard Advisors.

“We had a very difficult economic environment. Weather patterns were not favorable toward the end of season, and that resulted in one of the most challenging economic seasons we’ve seen in decades.”

The figures exclude auto and gas sales but include grocery, restaurant and specialty food sales. Although SpendingPulse did not exempt the food prices, McNamara said the decline would have been steeper without them.

“There’s a lot of food that provide a buffer for the total retail sales numbers,” he said.

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Source: Reuters

The number of U.S. workers filing new claims for jobless benefits jumped by 30,000 to a 26-year peak last week, government data on Wednesday showed, as the country’s year-long recession continued to chill the labor market.

Initial claims for state unemployment insurance benefits rose to a seasonally adjusted 586,000 in the week ended Dec 20 from a revised 556,000 the prior week, the Labor Department said. It was the highest since the week ending November 27, 1982.

Analysts polled by Reuters had forecast 560,000 new claims versus a previously reported count of 554,000 the week before.

A Labor Department official said there were no special factors influencing the data and no noticeable impact from severe winter weather in northern parts of the country.

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Source: The Raw Story

Britain edged ever closer to a recession on Tuesday and the IMF’s top economist warned of a second Great Depression, as stock markets awaited fresh US growth data in the hope of some Christmas cheer.

Britain’s economy shrank by 0.6 percent in the three months to September compared with the previous quarter, against a previous estimate of 0.5-percent contraction given last month, the Office for National Statistics said.

Britain will officially be in recession if the economy contracts again in the fourth quarter after already screeching to a halt in the second quarter during which this key European Union economy recorded zero growth.

News of weakening growth sent the British pound sliding under 1.06 euros, nearing a record low of 1.0463 reached last week, as dealers bet on more interest rate cuts from the Bank of England and forecast parity with the euro.

The dollar also dipped against the euro and the yen in morning trading.

“Contraction of 0.6 percent in the third quarter was even sharper than previously anticipated, highlighting the serious downturn in the economy,” said Howard Archer, an economist at the IHS Global Insight consultancy in London.

The IMF’s top economist, Olivier Blanchard, meanwhile said governments around the world should boost domestic demand in order to avoid a Great Depression similar to the downturn that shook the world in the 1930s.

“Consumer and business confidence indexes have never fallen so far since they began. The coming months will be very bad,” Blanchard said in an interview with the French newspaper Le Monde.

“It is imperative to stifle this loss of confidence, to restart household consumption, if we want to prevent this recession developing into a Great Depression,” he added.

New data out in France offered some respite from the gloom, however, showing that household consumption of manufactured goods — a key growth indicator — rallied 0.3 percent last month after slumping in October.

“It is a first small Christmas present for the French economy,” said Alexander Law, an economist at the Xerfi research centre in Paris.

But in Italy, retail sales figures went down 0.3 percent in October.

Denmark’s economy contracted 0.4 percent in the third quarter and the Dutch economy showed zero growth, official data showed. Finland’s unemployment rate rose to 6.0 percent in November from 5.8 percent a month earlier.

The European Central Bank issued some heartening pre-Christmas data showing that the eurozone’s current account deficit narrowed to 6.4 billion euros (9.0 billion dollars) in October from 8.8 billion euros in September.

European stocks were slightly up in midday trading ahead of the release of US third-quarter growth data, with the FTSE index in London up 0.46 percent, the Frankfurt Dax up 0.37 percent but the CAC 40 in Paris dipping 0.04 percent.

“UK and US GDP readings will be closely watched and with expectations low for both, any positive surprises could help provide some festive cheer,” said Jimmy Yates, a dealer at CMC Markets in London.

Asian stocks closed mostly down, with the Hong Kong stock market shedding 2.8 percent and Shanghai sinking 4.55 percent as a smaller-than-expected Chinese interest rate cut failed to boost market moods.

Oil prices also fell further to below 40 dollars a barrel in Asian trade, with New York’s main futures contract, light sweet crude for delivery in February, shedding 60 cents to 39.31 dollars a barrel.

The contract had fallen to 39.91 dollars in New York on Monday.

Energy analysts were also keeping a close eye on a meeting of key world gas exporters in Moscow amid fears of a “gas OPEC” similar to the Vienna-based oil cartel that could raise natural gas prices.

In a keynote speech, Russian Prime Minister Vladimir Putin told the conference that the “era of cheap gas” for consumers was coming to an end because of the expense of developing new fields.

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