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Softer-than-expected new-home sales and a surge in jobless claims heightened fears of a steep U.S. economic slide.
The White House lowered its U.S. economic growth forecast for 2008 Thursday because of trouble in the housing and credit markets, but said the economy remained resilient and a six-year expansion would continue
The U.S. economy grew at a robust 4.9% rate in the third quarter, but a surge in jobless claims last week signaled a major slowdown in the fourth quarter.
The bad news that was scaring the markets has, for now, become the good news. Remember Monday. Things were dire. The major stock indexes were in a tailspin, sinking to a level 10% from October's highs, technically a correction. But that's all changed, and in part it's because the markets are now convinced the Fed recognizes what ails it.
Bear Stearns is only the latest Wall Street firm to cut jobs. In recent months, U.S. banks and financial service companies with banking operations having been slashing tens of thousands of positions.
The Fed's No. 2 official signaled a willingness to cut interest rates further, saying renewed financial market turmoil could slow the economy more than thought.
The economy grew at a slower pace in the late fall as shoppers watched their pennies heading into the busy holiday season.
The economy may avoid a recession in the year ahead but it's almost certain that there will be months of slow growth.
Fed Vice Chairman Donald Kohn, in one speech, has changed Wall Street's view on the Fed. While most market players have expected the Fed to cut rates, the Fed itself seemed to be sending another message and that had some investors vexed.
New orders for long-lasting U.S.-made manufactured goods dropped for a third month in a row during October and companies appeared wary about making new investments, according to a Commerce Department report on Wednesday.
U.S. consumer confidence fell unexpectedly sharply in November to a two-year low on worries about rising gas prices and financial market volatility.
Goldman Sachs on Tuesday slashed its target for the expected trough in U.S. benchmark interest rates by a full percentage point, citing an increased probability of recession and the likelihood of a prolonged period of sluggish performance for the U.S. economy.
The dollar rose against most major currencies Tuesday after Citigroup Inc. said it will sell a $7.5 billion stake to the Abu Dhabi government, restoring some confidence in battered U.S. banks.
A parade of economic data in the next couple weeks will tell volumes about the economy and the Fed’s chances for achieving a soft landing.
The dollar was little changed against the euro and down against the yen Monday with investors finding few reasons to change their view that more Federal Reserve interest rate cuts are imminent.
The odds now point to a U.S. economic recession that slows global growth significantly even if necessary policy changes are implemented, former U.S. Treasury secretary Larry Summers said.
The euro set a fresh record high against the dollar early Friday, though the $1.50 level remained out of reach when the euro was knocked more than a cent off its peak by comments from a euro zone policymaker.
The dollar hit new record lows against the euro, the Swiss franc and a basket of currencies on Thursday on growing belief that the U.S. Federal Reserve will cut interest rates again next month.
The mood among consumers hit the skids in November as gasoline prices soared and the housing slump worsened.
The Federal Reserve is expecting slower growth and lower inflation next year. But minutes from the Fed's October meeting show policymarkers were reluctant to cut interest rates further.