Morning Economic News - October 31, 2008

US stock futures are down about 1.5% in overnight trading steering a middle course between a steep 5% decline in the Nikkei average, a 3.96% drop in the Hang Seng and a slight increase in the S&P/ASX 200. Oil prices are down 2.8% and the dollar is down 2% against the yen and up 1.6% against the euro and the pound - the same pattern that has held before several down days for US stocks the last few weeks. [Data as of 3:41 AM Eastern Time]

Money Supply (M1 and M2) - October 30, 2008

• M1 Seasonally Adjusted Prior Month: $1453.9 billion


• M1 4-Week Average: $1471.6 billion


• M1 Annual Change (Unadjusted): $84.7 billion

Jobless Claims - October 30, 2008

• Initial Claims: 479,000


• Change from Last Week: Unchanged

Gross Domestic Product (GDP) - 3rd Quarter 2008

• Real Annual Growth Rate: down 0.3%


• Previous Quarter Rate: up 2.8%


• Current Dollar GDP Growth: Up 3.8%

Data Stoke Campaign Battle Over Economy

The U.S. economy contracted in the third quarter, setting
the stage for a deepening recession and handing Democrats a new
political weapon in the days before Tuesday's presidential election.

German Government Plans Stimulus

Merkel is working on a $32 billion fiscal stimulus program
aimed at softening the slowdown without wrecking efforts to rein in
Germany's budget deficits.

Bank of Japan Cuts Interest Rates to 0.3%; Shirakawa Casts Deciding Vote The Bank of Japan cut its benchmark
interest rate to 0.3 percent in a split decision to help stave
off a prolonged recession.

Japan Inflation Slows, Job Prospects Worsen, Supporting Case for Rate Cuts Japan's inflation slowed in
September and employment prospects worsened, giving the central
bank more scope to cut interest rates.

Treasuries Rise as Economic Contraction Spurs Bets for a Further Rate Cut Treasuries rose, with 10-year notes
snapping a four-day slide, on speculation the Federal Reserve
will cut interest rates in December for a seventh time this year
to revive the shrinking U.S. economy.

Consumer Spending in U.S. Probably Fell in September as Job Losses Climbed Spending by U.S. consumers probably
dropped in September, capping its weakest quarter in three
decades and signaling the economy will continue to slump in
coming months, economists said before a report today.

U.K. Consumer Confidence Drops Close to Lowest Level Since at Least 1974 U.K. consumer confidence dropped in
October close to the weakest level since at least 1974 as the
financial crisis spooked British shoppers, GfK NOP said.

Economy contracts as consumers retreat

WASHINGTON
(Reuters) - The U.S. economy suffered its sharpest contraction in seven
years in the third quarter as consumers cut spending and businesses
reduced investment at the onset of what may be a severe and
long-lasting recession.

Who shrank the economy? Food prices dent U.S. growth