Last week, the U.S. government gave us more suspense than the TV scriptwriters. While Congressional members fought over an economic stimulus package, other global developments were taking place. Our (third) weekly industry crib sheet offers some timely news briefs.

Bank of England Cuts Bank Rate
The Bank of England’s (BOE) Monetary Policy Committee yesterday voted to reduce the official bank rate paid on commercial bank reserves by 0.25 percentage points to 5.25 percent, says the BOE. Inflation remains a concern with possibly quite sharp increases from energy and food expected.

Anemic Economy Predicted
Current indicators point to continued anemic growth for at least the first half of this year, said Janet Yellin, president and CEO, Federal Reserve Bank of San Francisco, last week. We can’t rule out the possibility of getting into an adverse feedback loop, she added, continuing that “an important objective of Fed policy is to mitigate the possibility that such a negative feedback loop could develop and take hold.” Regarding inflation, Yellin said, “I expect core inflation to moderate over the next few years, edging down to around 1.75 percent.”

President to Sign Stimulus Package
A $168 billion dollar stimulus package was passed by the Senate and House on Thursday, and the President said he would sign it this week. For 2008, $152 billion will be disbursed with an additional $16 billion slated for 2009, says the Joint Committee on Taxation. There will be a temporary increase in limitations on expensing of certain depreciable business assets, says The Library of Congress. President Bush is expected to sign the bill into law quickly.

Interest Charge May Hit $260 Billion
In fiscal 2009, the national cost of interest is expected to require $260 billion or nearly 10 percent of total projected revenues if Congress passed President Bush’s budget, according to Newsweek (via Forbes.com). If Congress were to pass his budget, “the next president will confront a $409 billion deficit next year, assuming that gross domestic product will grow 2.7 percent in 2008.”

Dollar Up Slightly
The dollar gained 2 percent last week against the euro and touched $1.4440 says Bloomberg News. The greenback was at an all-time low against the euro last November 23. Paris’ BNP Paribas told Bloomberg “the dollar will strengthen to $1.37 by year-end.”

Huge Deficit Is the Problem
The dollar value will fall more, according to Warren Buffet. The Oracle of Omaha, and one of the richest men in the world, points to “the U.S.’s gargantuan trading deficit as the heart of the problem. Force-feeding the rest of the world $2 billion a day is inconsistent with a stable dollar” says Forbes.com.

Consumers Spent Minimally in January
Chain stores in the United States reported their slowest January since 1970, with same-store sales growing 0.5 percent compared with 2007, says the International Council of Shopping Centers (ICSC). Sales declined 5.7 percent in department stores and 2.2 percent in luxury chain stores.

Where We Will Spend Tax Rebates
Survey results conducted by the ICSC and UBS Securities show that 24 percent of 1,000 consumers questioned between January 31 and February 3 said they would spend their tax rebates from the stimulus package in stores. Most (43 percent) will use the money to pay down debt or save (26 percent) the rebate.

Productivity Increase Rate Fell in Q4 2007
During the last quarter of 2007, the U.S. productivity increase rate for nonfarm business was 1.8 percent, down from the third quarter’s 6.0 percent and the second quarter’s 2.2 percent — but up from the first quarter’s 0.7 percent — creating a yearly average of 1.6 percent. For a yearly comparison, the average for 2006 was 1.0 percent; for 2005, it was 1.9 percent, said the U.S. Department of Labor.

U.S. Truck Tonnage Surges to Close ’07
The “advanced seasonally adjusted For-hire Truck Tonnage Index jumped an impressive 4.1 percent in December 2007,” reports Today’s Trucking. However, “most of the last 12 months in 2007 proved to be depressing for general freight haulers south of the border and international truckers that rely on that market.”

2006 Best Year Ever for Freight Hauling
“Cross-border freight volumes may be struggling now, but the downturn comes a year after the U.S. experienced its best freight hauling period ever,” which was 2006, Today’s Trucking again reports. In 2006, carriers hauled 69 percent of the total volume of freight transported in the U.S. and this would amount to 83.8 percent of America’s freight bill.

Slight Dip in Initial Unemployment Claims
“In the week ending February 2, the advance figure for seasonally adjusted initial claims was 356,000, a decrease of 22,000 from the previous week’s revised figure of 378,000,” states the Labor Department. Looking at monthly figures, January’s unemployment rate was 4.9 percent, down from 5 percent in December but higher than the rest of 2007′s months says the Labor Department.

Macy’s to Lay Off 2,300
Anticipating weak demand and as part of a consolidation, Macy’s will cut 2,300 managers from its workforce of 188,000, according to the Associated Press. The company will group the nation’s sales regions into “20 newly formed districts of about 10 stores,” explains a company statement.

Tata Nano Upsets Market (Already)
With sales of Tata’s Nano expected to begin in October in India, this $2,500 car has already upset the market, according to Autocar: “Since it was announced less than a month ago, the Nano has almost single-handedly destroyed the value of budget secondhand cars in India.” Values for used inexpensive cars in India have reportedly dropped 30 percent in only two months. Retail sales of current competitor’s new cars are also stalling. Registrations of one competitive model were down 20 percent in January alone, says WindingRoad.com.

Chrysler Unleashes Project Genesis
Chrysler’s previous consolidation strategy, dubbed “Project Alpha,” was implemented in 2004 to trim and combine dealers. All told, Chrysler was able to cut its dealer network down from 4,000 to 3,600 — not nearly enough to get outlets on par with demand. Now Chrysler Chief Executive Robert Nardelli and Vice Chairman James Press have a new plan: Eliminate overlapping models and consolidate showrooms so that Chrysler, Jeep and Dodge vehicles are sold in the same stores. The initiative even has a cool-sounding name: Project Genesis.

Pet Food Defilers Indicted
A federal grand jury indicted two Chinese companies, one American company and their top executives for their roles in manufacturing and importing a tainted ingredient used to make pet food, says an announcement from the Office of the U.S. Attorney, Western District of Missouri. The announcement notes that evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.