Last Week in the News (December 8, 2008)

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending November 28 soared 112.1% from the previous week. Purchase volume increased 38%, while refinancing applications jumped 203.3%.

The Labor Department said that productivity rose at an annual rate of 1.3% in the third quarter. That’s down from the 3.6% growth rate in the second quarter, but higher than the 0.9% rise economists expected.

The Commerce Department reported Monday that construction spending dropped by 1.2% in October, a bigger drop than the 0.9% decline analysts had expected.

The National Bureau of Economic Research officially announced the U.S. economy slipped into recession in December 2007. The economic expansion from November 2001 to December 2007 lasted 73 months. The previous expansion of the 1990s lasted 120 months. The average expansion since the end of World War II has lasted 57 months.

The Institute for Supply Management reported the monthly index of manufacturing activity fell to 36.2 from October’s 38.9. The November reading was the lowest since May 1982. The institute also announced its services sector index fell to 37.3 in November from 44.4 in October. Economists had expected a reading of 42. Figures below 50 indicate contraction.

The Commerce Department reported Thursday that factory orders dropped 5.1% in October, the largest decrease since an 8.5% fall in July 2000. Economists had expected a 4% drop.

Upcoming on the economic calendar are reports on pending home sales on December 9, and producer price index and retail sales on December 12.