Last Week in the News (December 22, 2008)

On Monday, December 15, it was announced that the National Association of Home Builders/Wells Fargo housing market index remained at a record low of 9 in December. That is the same reading for the previous month of November. An index reading higher than 50 indicates positive sentiment about the housing market.
The Federal Reserve reported that industrial activity fell by 0.6% in November. Economists had expected a decline of 0.8%.

The Labor Department reported Tuesday that consumer prices fell 1.7% in November — the largest decrease since record keeping began in 1947. The report reflected a steep fall in energy costs, which dropped 17% in November, following an 8.6% decline in October.

On Tuesday, the Fed cut its key interest rate to a range of zero to 0.25%. This brings the interest rate that banks charge each other to the lowest level on record.

The Commerce Department said construction of new homes fell in November by 18.9%, the biggest drop in 25 years. The decline pushed construction down to a seasonally adjusted annual rate of 625,000 homes, the slowest pace on records dating to 1959.

The Conference Board reported Thursday that its index of leading economic indicators fell for the second straight month, dropping 0.4% in November. That was slightly better than the 0.5% decline economists had expected. The index is designed to forecast economic activity in the next three to six months.

Upcoming on the economic calendar are reports on existing home sales and new home sales on December 23, and durable goods orders on December 24.