Last Week in the News (December 15, 2008)

The Reuters/University of Michigan consumer sentiment index unexpectedly rose in December to 59.1. The index had hit a 28-year low of 55.3 in November. Economists attributed the gain to the fall in gasoline prices.

The National Association of Realtors reported Tuesday that the pending home sales index dropped 0.7% to 88.9 in October from a reading of 89.5 in September. The October reading was 1% lower than a year earlier. Economists were expecting a drop of 3.2%. Pending home sales declined by 4.3% in September.

On Wednesday, the Commerce Department reported that wholesalers reduced their inventories by 1.1% in October. It was the biggest cutback since November 2001. Economists had expected a decline of only 0.2%. Sales at the wholesale level plunged by 4.1% in October, the largest decline on record.

The Labor Department reported Thursday that applications for jobless benefits in the week ending December 6 increased to a seasonally adjusted 573,000 from 515,000 in the previous week. The increase was more than the 525,000 claims economists had expected.

The Commerce Department reported that retail sales dropped 1.8% in November. The decline was the fifth straight monthly drop. Also, it was reported that total business inventory decreased 0.6% in October, three times the amount economists had expected. It was the biggest drop in inventories since August 2003.

The Labor Department reported the producer price index, which tracks wholesale prices, fell 2.2% in November. That followed a record 2.8% drop in October. Economists had expected a 2% decline.

Upcoming on the economic calendar are reports on consumer price index and housing starts December 16, and the index of leading economic indicators on December 18.