Ben Bernanke and team are using interest-rate cuts, investment incentives and rebates to combat the continued contraction of the U.S. housing market, rising energy costs and slowing job creation. And thanks to tighter credit conditions for some firms, business spending should be “subdued” for the next several months. Yes, the Ides of March has come, but it has not passed.

U.S. Manufacturing Fails to Grow in February
The United States manufacturing sector contracted in February, the Institute for Supply Management reports. The ISM index fell to 48.3 percent in February from 50.7 percent in January. Readings below 50 percent indicate more firms are contracting than expanding. The new orders index fell to 49.1 percent from 49.5 percent. The production index fell to 50.7 percent from 55.2 percent. Seven of 18 industries were growing in February.

Northrop-EADS Beat Boeing for Pentagon Contract
Northrop Grumman and European Aeronautic Defence and Space Co. (EADS) jointly won a $40 billion contract to turn Airbus jets into flying tankers for U.S. military aircraft. Northrop and EADS were in competition with Boeing for the contract. EADS and its U.S. partner, Northrop Grumman, won the contract to build military refueling planes Friday, “one of the biggest Pentagon contracts in decades,” The Associated Press notes. It was a blow for Boeing, which had supplied refueling tankers to the Air Force for nearly 50 years. The contract to build up to 179 aircraft is the first of three awards worth up to $100 billion over 30 years.

OPEC Rethinking Output Cut
With high oil prices weighing on a struggling economy, the OPEC oil cartel is reconsidering its plans to cut production, a move that could push prices above their current record levels. Instead, OPEC is likely to keep output unchanged when its members meet Wednesday, reports The New York Times.

Wages for 2007 Fell
Real average hourly earnings in manufacturing edged down about 3/4 percent last year, while for retail trade — an industry that typically pays relatively low wages — the measure of real wages fell about 2 percent, according to a new Federal Reserve Bank report. Turning to business investment, the economic and financial conditions that influence capital spending were fairly favorable in mid-2007, but they subsequently worsened as the outlook for sales and profits soured and as credit conditions for some borrowers tightened.

DOT Offers $3 million to Help Cut Congestion
The U.S. Department of Transportation‘s Research and Innovative Technology Administration is making up to $3 million in initial funding available to private industry, research organizations and governmental units to reduce congestion and improve the safety and performance of the nation’s transportation system through field testing of deployment-ready technologies.

GDP Estimates Edge Upward
In October, the Federal Reserve Board estimated gross domestic product growth (GDP) at 1.3 percent to 2.0 percent in 2008, 2.1 percent to 2.7 percent in 2009 and 2.5 to 3.0 percent in 2010. At the same time, the Board expects unemployment to rise slightly in 2008 and then gradually decline in 2009 and 2010.

Confidence Continues Slide
The Conference Board Consumer Confidence Index, which had declined in January, fell sharply in February. The Index now stands at 75.0 (1985=100), down from 87.3 in January. The Expectations Index declined to 57.9 from 69.3. The Present Situation Index decreased to 100.6 from 114.3 in January.

Understatement: Economic ‘Uncertainty’
Testifying before Congress, Federal Reserve Chairman Ben Bernanke said that the economic situation has become “distinctly less favorable” since last summer. Yep, that’s one way to put it. Moreover, considerable downside risks to economic activity have emerged, says a Federal Reserve Board report. Federal Open Market Committee participants (Board members and Reserve Bank presidents) indicated that considerable “uncertainty” surrounded the outlook for economic growth, says the Board.

Just Make It Through Year-End
The recession will not last much longer than the end of 2008, Charles Biederman, the founder and chief executive of TrimTabs Investment Research told The New York Times. “People will start feeling better late this year,” he added. That’s nice.