Unseasonably mild weather in January, coming after unseasonably severe weather in December, generated a huge increase in housing starts. Moreover, February's weather is likely to generate a big decline in housing activity next month.

Less refinancing activity should dampen consumer spending -- although that has not yet occurred.

Although manufacturing activity is still expanding, momentum in the manufacturing sector has clearly faded. This report confirms that the FOMC was correct in pausing their tightening cycle at last week's meeting.

Although home buying remains at relatively high levels, and though no longer robust, refinancing activity has slumped. Less refinancing activity should dampen consumer spending.

Although home buying remains at relatively high levels, although no longer robust, refinancing activity has slumped. Less refinancing activity should dampen consumer spending.

Although higher interest rates appear to have begun to have a negative impact on housing activity and consumer spending, sturdy domestic demand and improving international economies have generated an acceleration in manufacturing activity.

It is unlikely that the region is really an oasis of activity in an otherwise bleak manufacturing landscape.

Labor markets are deteriorating rapidly. Layoffs remain at a fast pace, while hiring has all but stopped. As economic activity continues to unravel, there are few prospects for a near-term turnaround. The national unemployment rate, now at 4.9 percent, should breach 6 percent before the economy begins to recover.

Labor markets are deteriorating quickly in the wake of the terrorist attacks on September 11. The economy was quite weak before the attacks, which have accelerated the pace of layoffs. As layoffs spiral higher, hiring activity has stopped, giving a strong upward push to joblessness.