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Vital Signs: Deeper Damage from Housing?

On tap: January readings on new and existing home sales, home prices, personal spending and income, and durable goods orders

The potential economic fallout from housing may be far from over. That’s bad news for the economy at large. Once widely viewed as a well contained problem, economists are now worried that housing could stimulate a wide range of damage to the economy through 2008.

Among those concerned about the ongoing collapse in housing are officials at the Federal Reserve. In the minutes from its Jan 29-30 monetary policy meeting, Fed members thought housing was “one of the major sources of downside risk to the economic outlook.” That comes on top of new economic growth projections that revised down the 2008 outlook to growth in real gross domestic product to a paltry 1.3% to 2%.