The Conference Board’s Consumer Confidence Index was release last week and the news is pretty much what market-watchers expected. Worried about their jobs and incomes, consumers reported the lowest levels of confidence in two years.

A slight decline in the Present Situation Index showed consumers have mixed feelings on the current conditions, while the larger drop in the Expectations Index revealed that consumers hold diminished expectations for the next six months.

Meanwhile, the Conference Board of Canada released its Consumer Confidence Index for November and the opinions of consumers north of the border vary greatly from their southern counterparts.

The Present Situation and Expectation Indices both rose, along with the amount of money each household expects to spend this Christmas season. Good news for retailers, who have been aggressively promoting their price cuts in the wake of Canadian-American dollar parity.

The question of the week then is, will the Federal Reserve lower its federal funds rate on December 11 in hopes of loosening the purse strings with cheap credit? Or, with seven U.S. states now in recession, according to a recent article by Jim Haughey, will the Fed focus on controlling inflation?

After Bernanke’s appearance in front of a testy congress earlier this month, it would certainly appear that the short-term solution — lowering the federal funds rate — may create far more problems down the road, as both the U.S. currency and the overall economy grow more unstable.

Here’s a quick look at some of the past week’s other economic news.

U.S. gross domestic product rises
Third-quarter 2007 U.S. real gross domestic product (GDP) increased at an annual rate of 4.9%, according to initial estimates released by the U.S. Bureau of Economic Analysis.

The increase in real GDP in the third quarter primarily reflected encouraging contributions from exports, personal consumption expenditures (PCE), private inventory investment, equipment and software, federal government spending, non-residential structures, and state and local government spending. These contributions helped to partly offset the negative contribution from residential fixed investment.

Canadian gross domestic product advances only slightly
Economic growth in Canada moderated in the third quarter, as real gross domestic product (GDP) advanced 0.7%. The third-quarter annualized change was 2.9%.

Economic production was up by 0.1% in September, after increasing 0.2% in August and 0.1% in July. Final domestic demand continued its buoyancy (+1.1%), outpacing GDP for the 11th quarter in the past 12.