Clearly the most important numbers of the week will come Tuesday, but following close behind will be Friday’s employment report. Regardless of partisan reaction to the vote, there will not be a lot of cheering by week’s end.

The employment numbers will feel like piling on, coming as they do after a bitter week that saw a dismal consumer confidence report corroborating -- or corroborated by -- the Gross Domestic Product report.

Indeed, it seemed as if Halloween came early in the week just ended. Even though some of the data were not as bad as expected, they were nonetheless weak.

There were some “canaries in the coal mine” in the reports for the week leading up to Election Day, both numbers and words. Probably the most ominous -- and prescient -- were the comments in the Federal Open Market Committee’s announcement Wednesday of its decision to cut the target Fed Funds rate.

“The pace of economic activity appears to have slowed markedly,” the FOMC said “owing importantly to a decline in consumer expenditures.” The Committee warned “the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.”

That slowdown in spending was responsible for the 0.3% (quarterly rate annualized) downturn in Gross Domestic Product for the third quarter which was the deepest drop since the third quarter of 2001 when the economy contracted by 1.4%. Spending itself shriveled 3.2%, the largest quarterly decline in 28 years. The data for personal income and spending one day later showed spending essentially fell off a cliff in September, the last month of the quarter, dropping 4% (monthly rate annualized). 

Below the radar, the income-spending report showed a third monthly increase in personal interest payments even though the Fed Funds rate had been unchanged at 2% since April (until the Federal Open Market Committee reduced the rate in two steps in October to 1%). That interest payments increased while interest rates did not means consumer borrowing and outstanding debt has gone up, a prescription for future ills.

The negative GDP report put to rest any argument about whether the nation is in recession, with the debate shifting to when the downturn began. If the downturn began at the beginning of this year -- with a brief stimulus-related surge -- and forecasts that we won’t emerge from this slump until mid-2009, the recession would be 18 months -- longer than either of the last two. The official start date of the recession will be established by the National Bureau of Economic Research. Using employment trends as a guide -- specifically payroll jobs -- an estimate of first quarter 2008 would not be misplaced, since jobs have fallen each month since the year began.

The Halloween report of a slowdown in personal income growth in September reflected a sharp drop in wage and total compensation growth for the month -- each up just 0.1%. Year-year wage growth at 3.4% is the weakest since September 2003 and reflects the changing dynamic in labor markets. The weak wage growth (wages represent about 55% of total personal income) continues the squeeze on household budgets and the ability to spend, explaining the need for consumers to borrow. But the weak wage growth suggests it will be a while before consumers feel confident enough to resume spending and certainly will extend the housing slump.

The other key data point in the past week was the report continuing claims rose 172,000 from mid-September to mid-October, suggesting another sharp drop in payroll jobs in next week’s employment report. Jobs fell 159,000 in September when continuing claims increased 114,000.

The employment report in the upcoming week will, if nothing else, extend the Halloween fright with forecasts of job cuts nearing 200,000, a level unseen since March 2003 when payrolls shrank by 212,000. A loss of 200,000 jobs in October would also mean payrolls will have contracted by almost 1,000,000 since the beginning of the year.

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.