December 15-16, 2008 FOMC Minutes

The Fed seems a bit concerned about the horse now that its out of the barn . . .

“The information reviewed at the December meeting pointed to a significant contraction in economic activity in the fourth quarter. Conditions in the labor market deteriorated considerably in recent months as most major industry groups shed jobs.

Private payrolls continued to fall at a faster pace than earlier in the year, and the unemployment rate rose to 6.7 percent…The housing market weakened again as construction activity, new home sales, and home prices declined further. In the business sector, investment in equipment and software appeared to continue to contract.

Industrial production fell markedly in November after sizable declines in the preceding two months. The recent contraction in industrial output was broadly based…

Real personal consumption expenditures (PCE) fell for the fifth straight month in October, with the slowdown evident in nearly all broad spending categories.

Sales of light motor vehicles, which slumped in October, fell further in November, but the available information on retail sales suggested a small increase in real outlays for other consumer goods…

Real construction activity continued to decline in November. Single-family housing starts and permit issuance fell further…

In the business sector, investment in equipment and software appeared to be contracting at a faster rate in the fourth quarter than during the third quarter…

As financial market conditions worsened over the intermeeting period, investors seemed to become more concerned about the likelihood of a deep and prolonged recession…

Source:
Minutes of the Federal Open Market Committee
December 15-16, 2008
http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20081216.pdf

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