Is It Recession?

The last time consumers were this pessimistic, the country was in the midst of recession. The consumer confidence index is at a level not seen since February 1992, according to Reuters/University of Michigan numbers out today, and "has only been this low during the recessions of the mid 1970s, the early 1980s and the early 1990s," the survey director said. More »

Companies in Silicon Valley are slowing spending and stockpiling funds to prepare for a possible recession, with many startups raising safety-net cash from investors. Venture capitalists, who raised more funds last year than any year since 2001, continue investing, reports the Wall Street Journal , despite a recent survey that found their confidence in the region at a four-year low. More »

Federal Reserve Chairman Ben Bernanke signaled today that further interest rate cuts might be necessary, citing continuing fallout from the credit and housing market collapses, reports the Wall Street Journal . Bernanke told the Senate Banking Committee he expected "a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt." More »

President Bush signed Congress’ economic stimulus bill into law today, ensuring that the tax rebates at the heart of the $168 billion plan will find their way into American bank accounts by May. The average rebate for an individual will be $600, with $1,200 for couples and a $300 add-on per child, reports the AP. More »

Inflation worries have some Fed officials hinting that interest-rate cuts may slow down, sparking concerns among investors who expect the central bank to trim rates 75 more basis points at its March 18 meeting, reports the Wall Street Journal. Rates have been reduced 2.25% since September—to 3%--in an effort to rally the flagging economy More »

Congress approved an economic stimulus plan today that will give rebates of between $600 and $1,200 to most Americans. It now awaits President Bush's expected signature before checks can go in the mail. The House quickly approved the measure hours after the Senate finalized its version of the $168 billion bill, the New York Times reports. More »

Winter storms and lagging gift-card redemption iced Wal-Mart’s January same-store sales growth, the retailer said, raising concerns the US is in a recession, reports the Wall Street Journal . Wal-Mart expected 2% sales growth in stores open more than a year, but saw sales bump just 0.5%. Its 1.4% rise in same-store sales for the fiscal year was the lowest in 30 years. More »

Billionaire Warren Buffett thumbed his nose at eminent investment banks today, claiming they caused their own demise in the subprime mortgage meltdown. "It's a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end," Buffett said. More »

US service industries took a staggering and unexpected plunge in January, contracting at a pace not seen since the last recession. In today’s non-manufacturing report, which leaked nearly an hour early, the index plummeted from 54.4 to 41.9, far more than the 53 analysts forecast. Stocks fell broadly as a result. More »

The collapsing housing market, shaky employment security, and uncertain economic outlook are changing Americans' buying habits: They’re paying with cash. Plastic has become synonymous with debt, helping revive the pay-as-you-go mentality, reports the New York Times . The change could have a major impact on an economy, and a culture, based on consumer credit. More »

Americans' concern over the domestic economy is at a level not seen in nearly 15 years, and voters doubt the Bush stimulus package will avert a recession, a new Washington Post -ABC News poll shows. Eight in 10 Americans rate the economy as "not so good" or "poor," and 39% say the economy and job security are their primary electoral concern. More »

Workers who’ve lost a job are having a tougher time finding a new one as the economy contracts, marking an end to more than a decade and a half of rapid, sometimes phenomenal, US job growth, writes Business Week’s Peter Coy. The loss of 17,000 jobs in January, the first monthly decline since August 2003, raised concerns about job creation as well as recession. More »

Nonfarm payrolls declined 17,000 in January, the first monthly loss of US jobs since August 2003. The surprising loss—in manufacturing, construction, financials, and government—seems to vindicate aggressive action by the Fed, the Wall Street Journal reports. The number, which had been expected to climb by 75,000 jobs, raised both recession worries and hopes for yet another Fed rate cut. More »

The $157 billion stimulus bill passed by the Senate Finance Committee is "too complex," Treasury Secretary Henry Paulson said today. "Complexity is our enemy," Paulson said of the bill, which is "in danger of looking like a Christmas tree" once it goes to the full Senate. He said he prefers the House's version, which is "simple, broad-based and bipartisan," Reuters reports. More »

The Senate and White House face off today over economic stimulus packages designed to get consumers spending again. With bipartisan support, the Senate Finance committee approved a $157 billion plan that would give more than $1,000 to almost every family in the US. A White House proposal, backed by the House of Representatives, is considerably less generous. More »

The Federal Reserve cut a key interest rate by a half percentage point today, reports the Wall Street Journal, bringing the benchmark overnight lending rate down to 3% even as officials signaled that further cuts were possible. The widely anticipated move follows last week's emergency .75% cut to a rate that stood at 5.25% just a few months ago. More »

Economic growth braked so violently in the fourth quarter of 2007 that it wiped out a stellar third quarter, dragging annual growth to a 5-year low. Last quarter’s 0.6% GDP growth—after 4.9% pace in Q3—was just half what analysts expected, as the housing component plummeted 24%, its biggest fall since 1981. One key inflation gauge also saw a big 2.7% increase, Bloomberg reports. More »

The world economy will still catch a cold when America sneezes, but it won't be as bad as it would have been 5-10 years ago, the Washington Post reports. The International Monetary Fund predicts a 2008 global growth forecast of 4.1%—down from 4.9% last year—largely because of an expectation of a  US downturn. The impact could have been far worse, but American economic dominance has been diluted, leaving other economies better able to weather a US recession. More »