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Monthly Features Seven Economic Indicators Recent Economic News Major Index Twelve Month Charts Mid Month and Recent Updates Q and A regarding the economic stimulus payments The lies we tell ourselves about money President proposes to extend tax free withdrawals from IRAs Monthly Magazine IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting IRA Rollover Update Alternative Minimum Tax (AMT) - How It Affects Filing Season 2008 You can accidentally disinherit your heirs News Sources Past Issue Archive

News Stories

Q and A regarding the economic stimulus payments
Here are several selected Q and A's. For the complete article, please visit the IRS website.
Q. What do I need to do to get an economic stimulus payment?
A. All you need to do is file a federal income tax return for 2007. Even if you are not otherwise required to file a tax return, you must file a 2007 return in order to receive a payment this year. Although some filers, such as high-income filers, will not qualify for a stimulus payment, most will. You do not need to calculate the amount of the stimulus payment. If you qualify, the IRS will automatically figure it and send it to you.
Q. How do I find out if I am eligible?
A. Most people with a 2007 net income tax liability will qualify. This includes most people who get tax refunds. Net income tax liability is the amount shown on Form 1040, Line 57 plus the amount on Line 52. For 1040A filers, it is the amount on Line 35 plus the amount on Line 32. For Form 1040EZ filers, it is the amount on Line 10. Some higher-income taxpayers will not receive a stimulus payment or will receive a reduced payment.
Q. When will I receive my stimulus payment?
A. The Treasury Department will start sending out payments in early May.
Q. Will my stimulus payment be included in my regular tax refund? Will the checks or direct deposits come at the same time?
A. No and no. There will be two payments. You will receive one payment for your regular tax refund and later you will receive a separate stimulus payment.
Q. I have not yet filed my 2007 tax return. Can I still qualify for a stimulus payment in 2008?
A. Yes, but you must file a 2007 tax return. The IRS encourages you to file a return even if your income is low or much of your income is tax-free. File your return, if possible, by the regular April 15 deadline. If you file after April 15, with or without a tax-filing extension, your payment will be delayed. If you qualify for a payment, you can insure that you get it by filing your return by Oct. 15, 2008.
Q. Is my stimulus payment taxable?
A. No. You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment. In the event you do not qualify for the full amount this year but you do next year, you will need to have the letter as a record of the amount you previously received.

The lies we tell ourselves about money
If you are an impulse shopper who simply can't stop throwing money around, recognizing some of the common lies people tell themselves to justify their spending could help you rein in your urges, says syndicated personal finance columnist Gregory Karp, who also writes for The Morning Call. In his new book ''Living Rich by Spending Smart,'' he lists cliches that freewheeling spenders treat as mantras:

President proposes to extend tax free withdrawals from IRAs -
The Pension Protection Act of 2006 provided an exclusion from gross income for otherwise taxable distributions from a traditional or a Roth IRA made directly to a qualified charitable organization. The exclusion may not exceed $100,000 per taxpayer per taxable year, is applicable only to distributions made on or after the date the IRA owner attains age 70 1/2, and is effective for distributions made in taxable years beginning after December 31, 2005 and before January 1, 2008. The exclusion applies only if a charitable contribution deduction for the entire distribution would otherwise be allowable under current law, determined without regard to the percentage-of-AGI limitation. No charitable deduction is allowed with respect to any amount excludable from income under this provision. The Administration proposes to permanently extend this exclusion, effective for distributions made in taxable years beginning after December 31, 2007.
2/14/08 Budget of the United States Government Fiscal Year 2009

IRS Warns of New E-Mail and Telephone Scams Using the IRS Name; Advance Payment Scams Starting
The Internal Revenue Service today warned taxpayers to beware of several current e-mail and telephone scams that use the IRS name as a lure. The IRS expects such scams to continue through the end of tax return filing season and beyond. The IRS cautioned taxpayers to be on the lookout for scams involving proposed advance payment checks. Although the government has not yet enacted an economic stimulus package in which the IRS would provide advance payments, known informally as rebates to many Americans, a scam which uses the proposed rebates as bait has already cropped up. The goal of the scams is to trick people into revealing personal and financial information, such as Social Security, bank account or credit card numbers, which the scammers can use to commit identity theft.
IRS Newswire 1/30/08

IRA Rollover to be Considered in 2008, Possibly Made Retroactive
The House of Representative adjourned for the holidays before completing its work on a package of tax extenders that included the Individual Retirement Account (IRA) rollover provision. However, Congress is expected to consider the package in January and possibly make the provisions retroactive to the beginning of 2008.
AFP 12/20/2007

Alternative Minimum Tax (AMT) - How It Affects Filing Season 2008
The upcoming tax season is expected to start on time for everyone except for certain taxpayers potentially affected by late enactment of the Alternative Minimum Tax "patch." Following extensive work in recent weeks, the IRS expects to be able to begin processing returns for the vast majority of taxpayers in mid-January. However, as many as 13.5 million taxpayers using five forms related to the Alternative Minimum Tax (AMT) legislation will have to wait to file tax returns until the IRS completes the reprogramming of its systems for the new law. IRS has targeted Feb. 11, as the potential starting date for taxpayers to begin submitting the five-related returns affected by the legislation. The February date allows the IRS enough time to update and test its systems to accommodate the changes without major disruptions to other operations related to the tax season. See IRS News Release 2007-209 for more information.

Returns that include the following forms cannot be filed until Feb. 11, 2008:

You can accidentally disinherit your heirs
By all accounts, Anna Nicole Smith loved her baby daughter Dannielynn. She shielded her from the media, provided her with constant care and surrounded her with every comfort. She also accidentally disinherited her. Here's how: In a will executed in 2001, Anna Nicole placed all of her assets in a trust and named her son Daniel by name (rather than by the more inclusive term "my issue") as sole beneficiary. When Daniel predeceased his mother, the trust legally lapsed for want of a living beneficiary, since Anna Nicole had failed to name a contingent beneficiary for Daniel. Then, because she failed to update her will to include Dannielynn before her own untimely demise at age 39, her sole surviving child was accidentally disinherited. As a result, Anna Nicole's estate -- including the fortune she may someday be awarded from the estate of her late husband, Texas oil billionaire J. Howard Marshall II -- will likely pass through the laws of intestacy -- that is, as if she had died without a will.
12/4/2007 Jay MacDonald Yahoo Finance

Here's how you can accidentally disinherit your loved ones:

THE ECONOMY: SEVEN INDICATORS - From CNN Money (as of 2/28/08)

The Indicator	What It's Telling Us	Next Update
Consumer Confidence	Lowest in 5 years	Mar 25
Retail sales	Surprising rebound	Mar 13
Leading Economic Indicators	Further weakness ahead	Mar 20
Manufacturing Activity (ISM)	Rebounding growth	Mar 3
Industrial Production	Growth outlook steady	Mar 17
Job Growth	Weak growth	Mar 7
Inflation (CPI)	Rising prices a growing concern	Mar 14

Recent Economic News

Economy Slowed to 0.6% Growth Rate in 4th Quarter - 2/28/08 AP in the NY Times
The economy skidded to a near halt in the final quarter of last year, clobbered by dual slumps in housing and credit that caused people and businesses to spend and invest more sparingly. The Commerce Department reported Thursday that the gross domestic product increased at a scant 0.6 percent pace in the October-to-December quarter. The reading -- unchanged from an initial estimate a month ago -- underscored just how much momentum the economy has lost. In the prior quarter, the economy clocked in at a brisk 4.9 percent pace. Gross domestic product measures the value of all goods and services produced in the United States and is the best barometer of the country's economic health. Economists had thought the newly released fourth-quarter GDP would have been bumped up to a 0.8 percent growth rate. Economists surveyed by MarketWatch were anticipating 0.7%. The housing picture looked even more bleak in the new report. Builders slashed spending on housing projects by a whopping 25.2 percent on an annualized basis in the fourth quarter, the biggest cut in 26 years. And, even though economic growth slowed, inflation picked up -- an ominous mix that could spell further trouble for the economy.

U.S. Jan. durable-goods orders fall 5.3% - 2/27/08 MarketWatch
Demand for durable goods fell back in January after a burst of orders in December, the Commerce Department reported Wednesday, another sign that the economy is slowing. New orders for durable goods fell 5.3% in January, close to the 5.1% drop anticipated by economists surveyed by MarketWatch. December's gains were revised lower to 4.4% from 5% previously reported. Much of the decline in January was due to the unwinding of the flood of orders for aircraft in December. Declining demand was seen in almost every industry in January, however, despite reports of higher exports.

New Home Sales Drop in January - 2/27/08 AP in the NY Times In more bad news for the beleaguered housing industry, sales of new homes fell in January for a third straight month, pushing activity down to the slowest pace in nearly 13 years. The median price of a new home dropped to the lowest level in more than three years. The Commerce Department reported Wednesday that new home sales fell by 2.8 percent last month to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February 1995. The median price of a new home dropped to $216,000 in January, down 4.3 percent from the December median sales price, the point where half the homes sold for more and half for less. That was the lowest median price since September 2004 and underscored that the steep slide in housing is still under way.

New Data Show Rising Inflation and Slumping Home Values - 2/26/08 NY Times
Two worrisome trends for the economy - falling house prices and the rising cost of everything else - picked up speed in data reported on Tuesday, putting policy makers in an increasingly tough position. If they move too aggressively to cut interest rates and stimulate the economy, they might stoke inflation at a time when consumers are already squeezed by higher prices for food, energy, clothing and other goods. But if they chose more austere measures, the economy may weaken substantially faster. RELATED - 2/27/08 WSJ The decline in U.S. home prices accelerated in the fourth quarter, according to two leading barometers, compounding two of the biggest threats facing the nation's economy: faltering consumer spending and tight credit markets.

Energy, food push January's PPI 1% higher - 2/26/08 MarketWatch
Producer prices soared in January, pushed higher by energy prices and the biggest increase in food prices in more than three years, government data showed Tuesday. The producer price index climbed by 1% last month, the Labor Department reported. The closely followed PPI, which measures the rate of inflation at the wholesale level, had fallen 0.3% in December after having registered a jump of 2.6% in November. January's core PPI, which excludes food and energy prices, rose 0.4%, driven by higher drug and car prices. Year over year, the PPI is up 7.4% -- the fastest pace since 1981. Also on an annualized basis, the core PPI is up 2.3%. Economists surveyed by MarketWatch had been looking for the PPI to rise by 0.4%, although some expected much larger gains. They also forecast a 0.3% rise in the core PPI.

Consumer confidence lowest in 5 years - 2/26/08 CNN Money
A key measure of consumer confidence dropped significantly in February, to the lowest level in more nearly five years, amid mounting concerns about jobs and slowing business activity. The New York-based Conference Board said Tuesday that its Consumer Confidence Index plummeted to 75, the lowest level since March 2003, from a revised 87.3 in January. Analysts had expected a decline to 82, according to Briefing.com. The index rose slightly in December, but has now declined for a second-straight month. The 12.3 point monthly decline was the largest since September 2005.

Congress to examine housing proposals - 2/24/08 AP in Yahoo Business quoted in govexec
Congress is set to examine another round of possible repairs for consumers and investors threatened by widening cracks in the housing market. Proposals include easing bankruptcy rules, shielding banks from lawsuits and providing government assistance to homeowners facing foreclosure. Lawmakers also plan this week to question several high-profile mortgage and banking executives about industrywide losses and lavish executive-compensation packages. The housing proposals percolating on Capitol Hill, many of them designed by Democrats, are expected to face much tougher resistance than the recently approved economic stimulus package, which touched on the mortgage crisis in a limited way.

Home Resales and Prices Decline - 2/25/08 NY Times
The backlog of unsold homes continued to pile up in January, a sign that home prices will continue to drop as would-be buyers hold out for better deals. Sales of previously owned homes fell for the sixth consecutive month, dropping 0.4 percent, to an annual rate of 4.89 million, the National Association of Realtors said on Monday. While the decline was less than forecast, the sales pace is the slowest since the survey began nearly a decade ago (it was stronger than the 4.80 million pace expected by economists surveyed by MarketWatch). The median home price dipped to $201,100, down 4.6 percent from a year ago. At the current sales rate, it would take 10.3 months to sell off the current inventory of unsold homes. And economists see little relief in the months ahead, as a combination of tighter lending standards, the softening job market, and elevated inventories keep buyers on the sidelines. There was one hopeful sign in the January report - sales of single-family homes rose for the first time in 11 months (MarketWatch).

Freddie Mac: Fixed-rate mortgages rise again - 2/21/08 MarketWatch
U.S. fixed-rate mortgages rose in the latest week, according to Freddie Mac's survey released Thursday. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04% in the week ending Thursday, up from 5.72% a week ago, but lower than the year-ago 6.22%. The 15-year fixed-rate loan averaged 5.64%, up from 5.25% a week ago, but down from 5.97% a year ago. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.37%, compared with 5.19% a week ago and 5.96% a year ago.

Fed Reins in Growth Forecast - 2/21/08 Washington Post
The Federal Reserve yesterday slashed its forecast for the country's economic growth as fresh evidence showed that prices for a wide range of goods are soaring. The twin announcements crystallize the challenge facing the central bank as it tries to prevent a recession without letting inflation get out of hand. The Fed has been focused this year on the first concern, as the bank has rapidly cut interest rates to keep the economic downturn from becoming severe. But the elevated reading on consumer prices, coupled with oil prices that yesterday hit a new high of $101.32 per barrel, could leave the Fed with less flexibility to cut rates aggressively down the road, economists said. The forecasts for economic growth in 2008 from 17 top Fed officials range from 1 to 2.2 percent. In October, that range was 1.6 to 2.6 percent. Even that lowered projection does not indicate a recession. They also increased their consensus forecast of the unemployment rate. Many of the Fed governors and regional bank presidents attributed the sub-par growth expectation to "a deepening of the housing correction, tighter credit conditions . . . and higher oil prices," according to narrative summary of the policymakers' predictions.

U.S. Jan. leading economic indicators index falls 0.1% - 2/21/08 MarketWatch
The index of leading U.S. economic indicators dropped by 0.1% in January, the Conference Board reported Thursday, as weaker stock prices and housing data drove the index's fourth consecutive decline. At the same time, the coincident economic indicator index rose 0.1% in January, the business research organization said. That index measures where the economy is now. The group's labor economist said the rise in the coincident index shows that the economy wasn't in recession in January but that weak growth can be expected in the future.

Inflation Continues to Edge Up - 2/20/08 NY Times
Inflation rose more than expected last month, the government reported on Wednesday, adding to worries about the economy and sending a reminder to central bankers that rising prices remain a threat. Meanwhile, the housing crisis continued to take a toll on residential home construction. Groundbreakings for homes rose slightly but remained near their lowest levels since the early 1990s, and permits for new home projects fell again. The inflation report raised concerns among some investors that the Federal Reserve will back away from cutting interest rates again at its next meeting, on March 18, and stocks declined at the opening bell. Lower interest rates help stimulate growth but can cause prices to rise. Still, Fed officials have signaled they are more concerned about staving off a recession than tempering price pressures.
The Consumer Price Index rose 0.4 percent in January, a bigger gain than economists had predicted. Over the last 12 months, the index has surged by 4.3 percent, one of the highest year-over-year rates in decades, the Labor Department said. The rise was led by increases in the costs of food, gasoline, shelter, and transportation. The so-called core inflation rate, which excludes food and gasoline prices, ticked up 0.3 percent last month. Economists polled by MarketWatch were expecting the CPI to rise 0.3% in January after a 0.4% gain in December. The core rate was expected to rise 0.2% after rising 0.2% in the previous month.

U.S. Feb. home builders' index rises slightly - 2/19/08 MarketWatch
U.S. homebuilders' mood improved slightly for the second straight month in February. The home builders' housing market index rose to 20 in February from 19 in January, the National Association of Home Builders reported Tuesday. Economists had expected the index to hold steady at 19. Traffic in model homes picked up in the last month, the NAHB said.

Bleak New Batch of Data on Economy - 2/15/08 NY Times
A fresh batch of data on Friday presented a bleak picture of the economy, with rising prices of imported goods, struggling manufacturing and an erosion in consumer confidence. With the price of oil near record levels, import costs grew in January at the highest annual rate in a quarter century, the Labor Department said. In New York, manufacturing activity fell to its lowest level in five years. And consumers, responding to a national survey, said they felt worse about the economy than any time since the recession era of the early 1990s. The price of imports rose 1.7 percent in January and was up 13.7 year over year, the highest annual rate since the Labor Department records began in 1983. Fuel costs led the rise, ballooning by 5.5 percent last month. Imported food and beverages also cost more in January, and the price of Chinese goods ticked up by 0.8 percent. Export prices rose 1.2 percent, and American companies are also charging more for food, industrial supplies, and agricultural products. Sales of imports are lagging even as export sales surge. The trade deficit narrowed in 2007 for the first time in five years, the Commerce Department said on Thursday.

Industrial Production Up Slightly - 2/15/08 MarketWatch
Industrial production grew slightly in January, according to a report released Friday by the Federal Reserve. Industrial production rose 0.1% in January from the previous month, meeting the growth expectations of economists surveyed by Briefing.com. Capacity utilization for all industries, a measure of operating rates for the nation's factories, remained flat at 81.5%. Economists had expected utilization to slip to 81.4%. Industrial production has been volatile over the last year, registering up and down growth since January 2007.

Exports Help Narrow Trade Gap - 2/14/08 NY Times
The United States trade deficit shrank in 2007 for the first time in five years, buoyed by a surge in exports that has helped domestic businesses stay afloat as the domestic economy flags. The gap between what Americans import and export contracted by 6.2 percent last year, to $711.6 billion, the Commerce Department said on Thursday. In December, the deficit narrowed more than expected, dipping 6.9 percent, to $58.8 billion. Overseas sales were up sharply for the month, led by a surge in capital goods. Sales of computer and telecommunications equipment soared, while sales of civilian aircraft were up 33 percent alone. Over all, exports increased 1.5 percent in December and were 13.6 percent above their level a year prior. The record-low dollar has lured foreign buyers to cheap American goods, leading to a surge in export sales. Because the deficit came in lower than expected, economists said the government would probably raise its estimate for overall fourth-quarter growth. That could offer a shot in the arm to financial markets, which were cowed by the initial 0.6 percent growth estimate. The Labor Department will release a revised estimate on Feb. 28. The trade deficit narrowed 6.9% in December to $58.8 billion, below the $61.6 billion consensus forecast of economists polled by MarketWatch.

IRS Will Send Stimulus Payments Automatically Starting in May; Eligible Taxpayers Must File a 2007 Tax Return to Receive Rebate - 2/13/08 IRS Newswire IR-2008-018
The Internal Revenue Service today advised taxpayers that in most cases they will not have to do anything extra this year to get the economic stimulus payments beginning in May. The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payments.

Retail sales more than expected in January - 2/13/08 MarketWatch
U.S. retail sales were better than expected in January on higher auto and gasoline sales, providing a glimmer of light in the tough economic environment. But many economists warned it might be a false dawn. Retail sales rose 0.3 % in January after sinking 0.4% in December, the Commerce Department said. However, excluding autos and gas, sales were flat in the month. Economists expected a 0.3% decline in January sales, based, in part, on the dreadfully slow rate of auto sales in January.

Consumer confidence sinks lower - 2/8/08 AP on CNN Money
People's confidence in the economy sank even lower amid heightened fears about shrinking job opportunities and the possibility the country is falling into recession. According to the RBC Cash Index, confidence dropped to a mark of 48.5 in early February, from 56.3 last month. The new reading was the worst since the index began in 2002 and surpassed the previous low reached in January.

Rate of Growth in Consumer Debt Slowed in December - 2/08/08 - AP in the NY Times
Consumers increased their borrowing in December at the slowest pace in eight months, additional evidence that economic activity slowed significantly at the end of last year. For all of 2007, consumer credit rose at the fastest clip in three years. The Federal Reserve reported Thursday that consumer borrowing rose at an annual rate of 2.1 percent in December, a sharp slowdown from an 8.2 percent jump in November. It was the weakest showing since April, when credit increased just 1.6 percent. Economists had expected total credit to rise by $8 billion; instead it increased by about half that, $4.5 billion, to $2.52 trillion.

Pending home sales fall 1.5% in December - 2/7/08 MarketWatch
Sales contracts on previously owned U.S. homes fell 1.5% in December, a sign that home sales will continue to decline, the National Association of Realtors reported Thursday. The pending home sales index, based on contracts signed but not closed in December, was down 24.2% from the prior year's period. The index, which is considered a leading indicator of existing home sales, had also declined in November, after gains in September and October. In November, pending home sales declined about 3% from the prior month, compared with the prior estimate of a 2.6% decline.

Productivity Growth Slows and the Costs of Labor Rise - 2/7/08 AP in the NY Times
Worker productivity, a crucial factor in rising living standards, slowed sharply in the last quarter of 2007 while wage pressure increased. The Labor Department reported Wednesday that productivity, the amount of output for each hour of work, increased at an annual pace of 1.8 percent from October through December, down from a 6 percent pace in the July-September period. The slowdown reflected an overall weakening in economic activity. Labor costs rose by 2.1 percent, after having fallen by 1.9 percent in the third quarter and 1.1 percent in the second quarter. Still, the increase in productivity was nearly double what economists had been expecting, and the rise in labor costs was slightly less than expected. Economists had been looking for a 0.8% increase, according to a survey conducted by MarketWatch. For unit labor costs, their prediction was more accurate: 3.5%.

Freddie Mac: 30-year mortgage rate average dips - 2/07/08 MarketWatch
The 30-year fixed-rate mortgage average fell slightly from last week to 5.67% with an average 0.4 point for the week ending Feb. 7. Last week, the average was 5.68%, and in the year-ago period the average was 6.28%. "Long-term mortgage rates were little changed this week, largely in sync with the movements in the Treasury bond yields during the same time," said Frank Nothaft, Freddie Mac chief economist, in a statement. "Additionally, economic news released in the past week showed that the economy continues to be weak."

Senate OKs $150 billion economic stimulus plan - 2/7/08 MarketWatch
The Senate has passed a $150 billion economic stimulus package designed to provide a timely, targeted and temporary boost to the flagging U.S. economy. The Senate approved the measure, nearly identical to one passed by the House last week, on a 81-16 vote. The House will take up the bill quickly and is likely to send it to President Bush for his signature by the weekend. The plan would give tax rebates of up to $1,200 for households, with $300 more for each child. The full rebates would be sent to families with incomes under $150,000, including seniors and the disabled. The plan would also cut business investment taxes by $44 billion.

Retailers Report Weak January Sales - 2/7/08 AP in the NY Times
The nation's retailers delivered more evidence of a stumbling economy Thursday, as merchants reported their weakest January performance in nearly four decades, extending a malaise that has deepened since the holiday shopping season. The sales figures made it clear that consumers wrestling with high gas and food prices, a slumping housing market, an escalating credit crisis and a weakening job market retrenched further, buying mostly necessities even when redeeming their holiday gift cards. The disappointments cut across all sectors including discounters like Wal-Mart Stores Inc., teen retailers including Pacific Sunwear of California Inc. and mall-based apparel chain Limited Brands Inc. Even affluent shoppers are pulling back, hurting stores like Nordstrom Inc.

Services Index Plunges, Pointing to Recession - 2/5/08 Reuters in the NY Times
The U.S. services sector retrenched sharply in January to levels not seen since the 2001 recession, renewing fears about an economic slump, according to a survey released on Tuesday. The Institute for Supply Management's index of non-manufacturing plummeted to 41.9 from 54.4 in December, its largest monthly decline on record and a far greater drop than Wall Street expected. A Reuters poll of economists had produced a median expectation of a slip to 53.0. A reading below 50 indicates contraction. The employment index fell to 43.9 from 51.8, corroborating last week's dire U.S. payrolls report, which showed the first net monthly contraction in the labor market in more than four years. Weakness was evident across the board. A measure of new orders fell to 43.5 from 53.9.

U.S. Factory Orders Rose 2.3 in December - 2/4/08 AP in the NY Times
U.S. factories saw demand for their products rise in December by the largest amount in five months, a spot of welcome news that failed to change the picture of an economy struggling to stay afloat. The Commerce Department reported Monday that orders placed with U.S. factories rose by 2.3 percent in December. That was an improvement from the 1.7 percent gain posted in November and marked the biggest increase since July. The performance in December was slightly better than the 2 percent rise that economists were forecasting (2.5% expected by economists surveyed by MarketWatch). Orders for "durable" -- big-ticket goods, such as cars, that are expected to last at least three years -- rose by 5 percent in December, up from a 0.5 percent advance in November. Demand for "nondurable" goods -- including clothing, textiles and beverages -- dipped, however by 0.4 percent in December, compared with a 3 percent rise in November.

U.S. Jan. nonfarm payrolls decline by 17,000 - 2/2/08 NYTimes
The nation's employers eliminated 17,000 jobs in January, the government reported Friday, the first decline in the work force in more than four years, and the strongest signal yet that the United States may be in the early stages of a recession. The broad weakness in the job market, which affected many sectors, shows how the collapse of the housing bubble is rippling through the rest of the economy and suggests the likelihood of more pain for millions of American families in the months ahead from job losses, lower real wages and fewer working hours. MarketWatch - Economists had been expecting a 0.2% gain.

Consumer sentiment rose in January, UMich says - 2/1/08 MarketWatch
U.S. consumer sentiment rose in January, according to the University of Michigan consumer sentiment survey released Friday by UMich and Reuters. The index rose to 78.4 in January from 75.5 in December. Economists expected a result of 79.0. The current conditions index rose to 94.4 from 91.0, while the expectations index gained to 68.1 from 65.6.

Manufacturing activity rebounds - 2/1/08 CNN Money
A key index of manufacturing activity registered stronger-than-expected growth in January, according to a survey of purchasing managers in that sector released Friday. The Institute for Supply Management's (ISM) manufacturing index rose to 50.7, from 47.7 in December. Economists were expecting a reading of 48.8, according to Briefing.com. The tipping point for the index is 50, with a reading above that reflecting growth in the sector. A reading below 50 represents a decline in manufacturing.

U.S. construction spending falls 1.1% in December - 2/1/08 MarketWatch
Spending on U.S. construction projects fell by 1.1% in December as outlays on private residential construction took another tumble. Year over year, construction spending is down 2.3%. The overall drop was bigger than expected by economists surveyed by MarketWatch, who were looking for a decline of 0.5% in December. Spending on home construction declined by 2.8% in December after falling by 3% in November.

GOP Plans stimulus block - 2/1/08 govtexec.com
Backed solidly by the Bush administration, Senate Republicans said on Thursday that they would block a $157 billion economic stimulus package championed by Senate Democrats, who said they would have no choice but to quickly adopt a cheaper, more streamlined plan approved this week by the House. Democratic Senate leaders said they still hoped to secure changes to the House plan when they voted on it next week. They said they remained on track to get the plan, a portfolio of tax rebates and business tax breaks intended to jolt the economy, to President Bush for his signature by Feb. 15.

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