Is It Recession?

A barrel of crude could end up averaging more than $100 this year, federal handicappers are predicting, just weeks after the triple-digit mark seemed like a troublesome anomaly. OPEC’s parsimony with its reserves, spiking demand worldwide and a dwindling supply outside the Middle East are conspiring to squeeze rates—and last month’s record close of $110.33 might not be the worst of it. More »

Homeowners struggling to avoid foreclosure are about to get a boost from the Federal Housing Administration. The FHA commissioner is expected to announce plans to expand an aid program that will allow borrowers saddled with negative equity to write down part of their mortgages and refinance their homes with cheaper FHA-insured loans, reports the Wall Street Journal. More »

The US economy sputtered—as expected—in the fourth quarter of 2007, growing at the slowest rate since 2002, MarketWatch reports. Estimated growth of the US gross domestic product was 0.6% for the last three months of 2007, matching economists' forecasts. Consumer spending grew 2.3%, and exports increased 6.5%, both beating the Commerce Department’s predictions. More »

Stocks fell today amid a new wave of recession concerns, Bloomberg reports. A big drop by Citigroup led financials to their worst plunge in almost two weeks, and oil prices jumped back up after inventory showed supply unchanged from last week. The Dow ended down 109.74 to 12,422.86, the Nasdaq off 16.69 to 2,324.36, and the S&P 11.86 to 1,341.13. More »

Home prices plummeted again in January, falling a record 10.7% compared to January 2007, according to the bellwether S&P Case/Shiller Hope Price composite. The March consumer confidence index, also out today, plunged to a 5-year low in yet another indication of recession, Bloomberg reports. The Conference Board measures consumer confidence as well as expectations for the next 6 months; that metric fell to a level not seen since the Nixon administration. More »

The high-profile economic woes plaguing Wall Street and previously hot housing markets are spreading, raising the possibility of the worst recession Americans have faced in years. The New York Times crisscrosses the country, assembling anecdotal evidence—suddenly thrifty brides, unsold construction equipment, sinking earnings at FedEx—that suggests the slowdown could drag into 2009. More »

The Iraq war and the current economic crisis aren’t unrelated issues in the minds of most Americans, a CNN poll finds. 71% said the war, which began five years ago today, helped cause the economic storm. Just 32% support the mission, with 61% saying the new president should withdraw most troops “within a few months of taking office.” More »

Hank Paulson came closer than ever to conceding that the economy is in recession in a series of interviews yesterday, Reuters reports. Weary after a weekend in which he helped to broker Bear Stearns' fire sale to JPMorgan, the treasury secretary avoided the R-word but admitted: "There's no doubt that the American people know that the economy has turned down sharply. So to me much less important is the label that's placed on it today." More »

Home-equity loan defaults are soaring, the Wall Street Journal reports, as the trickle-down effect of the subprime mortgage crisis makes its way into what was once a source of big profits for lenders. JP Morgan Chase and Wells Fargo both escaped major writedowns on subprime mortgages gone bad, but already are feeling the pain from home-equity losses. More »

The Fed will inject huge quantities of cash into financial markets as part of a coordinated global attack on the credit crisis, Ben Bernanke announced today. The central bank will loan out another $200 billion, this time on a 28-day basis rather than overnight, the AP reports. The effort will coordinate with the European Central Bank and the central banks of Canada, England, and Switzerland. More »

The last month has made media boss Rupert Murdoch "a lot more pessimistic" about the outlook for the US economy, Reuters reports. Ad revenue is below expectations at his TV stations and newspapers and he expects "a temporary downturn for a year or so" at Dow Jones, the News Corp. boss told a media conference yesterday. It's the strongest public statement  yet among top media leaders concerning fears about a pending advertising recession. More »

Soaring gas prices and a still-boiling housing crisis are taking their toll on America's smaller retailers, with store bankruptcies and vacancy rates rising steadily as customers avoid impulse-buys that once fueled the industry's rapid expansion, reports AP. Vacancies hover between 7% and 8%, up from 5% just six months ago—and some analysts predict rates as high as 12.5% by the end of 2008. More »

The US lost 63,000 jobs in February, the second straight month payrolls contracted and the worst drop since 2003, catching economists off guard and fanning fears of recession anew, Bloomberg reports. Economists hoped the economy would add 23,000 jobs after declining a modest 17,000 in January, when the unemployment rate rose to 4.9%. More »

Home foreclosures and mortgage delinquency in the US saw record highs in the last three months of 2007. Reuters reports that 0.83% of US loans entered foreclosure in the fourth quarter, close to double the 0.54% of the same period in 2006. Mortgage delinquency hit 5.82%, the highest since 1985 and a percentage point higher than the year-ago period. More »

After a hitting record high in November, Google shares have fallen 40%, reports the Los Angeles Times. Investors are concerned that a downturn in consumer spending could slow Google's growth—previously thought to be recession-proof. "Now the shine is off Google, whether deservedly or not," one media analyst said of the pioneering search giant. More »

More than a million Americans are headed for bankruptcy in 2008, mostly due to crippling household debt, according to the American Bankruptcy Institute. There were 76,120 bankruptcy filings last month—a 37% increase over February last year, and the biggest monthly spike since the change in personal bankruptcy laws in 2005. February's filings were up 15% over January. More »

The US is already in a recession for all practical purposes, even if economic conditions haven't yet met the technical definition of at least two consecutive quarters of negative growth. That's the verdict of billionaire investor Warren Buffett, who tells CNBC that a serious economic slowdown is obvious in reports from retail businesses owned by his holding company. More »

Commercial real estate could be the next victim of the current economic downturn, and if it is, expect it to cause another full-fledged crisis, the Wall Street Journal reports. Commercial real estate values could fall as much as 26% over the next 2 years, Goldman Sachs analysts predict, leading to another round of huge write-offs and creating "a significantly longer tail than subprime." More »

Construction spending fell at its fastest rate in 14 years in January, the Commerce Department announced today, shattering expectations with a 1.7% drop. Analysts had expected just a 0.7% decline, the Wall Street Journal reports. Residential spending was the big drag, falling 2.9%, but non-residential spending was also down and could keep heading in that direction as banks raise commercial loan standards. More »

Even cheap foods like pizza and bagels are getting pricey these days over a mix of inflationary pressures, MSNBC reports. Last year's shocking 4% food price hike was driven by more than gas prices, one analyst says: It's diesel that fuels the trucks and trains that transport goods. "It's everything that gets shipped," he said—which makes diesel costs "much scarier" than the cost of gas. More »