Oil prices dropped a bit today, after a government report showed that inventories unexpectedly rose last week.

According to today's report from the Commerce Department, oil inventories rose by 200,000 barrels last week. Going into today's report analysts had forecast a 1.1 million barrel drop in supplies.

We get a second piece of positive news out of the housing industry in as many days today as the Commerce Department announced this morning that new home construction jumped 3.6% in June.

No one is going to put forth the argument that the housing market is all of a sudden in good shape again, but we are starting to see signs that things could be at least leveling off, which is the first step that needs to be made.

After a long six months of watching retail sales continue to slip, we get a bit of good news today, as January retail sales actually moved a bit higher.

Before today's announcement, analysts had been expecting that January would be the seventh straight month of falling retail sales, and the consensus was that we would see around 0.8% in the month. The good news is that retail sales were indeed higher in January, with a reported 1% jump during the month.

When you read the stories today about home construction hitting its lowest level since 1959, you probably think it's just more bad news -- but it's actually good news.

The only way we're going to even get near the bottom of the housing price drop is for the backlog of available homes to be sold. We'll only see prices start to climb back up when demand is higher than the available supply. We're still a long way off from that scenario, but if builders stop building, we'll get there a lot faster.

Based on the new numbers released today by the Commerce Department, the pace of new construction will put the U.S. on track to build the fewest new homes and apartments since the end of World War II. Commerce reported that construction of new homes and apartments dropped to 791,000 on an annual basis. Prior to today's report the slowest pace since World War II was in January 1991. This was the fourth straight monthly drop and I doubt it's the last one. There are still too many homes waiting to be sold.

The declines were led by a 31% drop in the Northeast and 13.7% drop in the Midwest. There were modest increases in the South (1.5%) and the West (7.5%). Given that the South and the West were the hardest hit at the beginning of the housing bubble burst, this could be good news that these hard hit areas are nearing their bottom.

The U.S. economy grew at an annual rate of 2.5% in Q4, the U.S. Commerce Department announced Thursday, slightly above the 2.2% consensus estimate.

The stat represents the U.S. government's final revision for Q4 GDP. The government's initial estimates had projected 3.5% growth for the last quarter of 2006. Hence, the 2.5% stat represents a substantial under-performance by the world's largest economy.

Slowing corporate earnings growth and business investment, combined with initial signs of a pull-back in consumer spending, and sub-prime loan defaults have economists concerned that the U.S. economy may slow too much in the first half of 2007 -- perhaps flirting with a recession. In 2006, the U.S. Federal Reserve increased short-term interest rates to slow the U.S. economy and take pressure off commodity prices, which had helped feed inflation.

Fly Analysis: The Q4 stat provides further evidence that the U.S. Federal Reserve has slowed the U.S. economy, as intended. The 2.5% stat represent moderate, sustainable growth -- one that in and of itself should not accelerate pressure on prices. It's an acceptable growth rate for the Fed -- not too fast and not too slow -- and one that further supports the Fed's neutral short-term interest rate policy stance to date in 2007. Along with upcoming inflation data, the Fed will now await further statistics for Q1 to determine if the economy is continuing to slow, of in growth has started to re-accelerate -- factors that will help determine monetary policy as 2007 progresses.

Ben Berkowitz is the business news editor at AOL. His weekly column highlights business stories with significant implications that were overlooked at first glance.

The story you didn't read this week but should have is the news that the Commerce Department is going to make $40 coupons available to people with TVs that can't tune digital signals and aren't hooked up to satellite or cable.

This is important because, in less than two years, analog TV as we know it will end in the United States. From February 17, 2009, stations must broadcast in digital only. The reason of course is money; it takes a lot less spectrum to broadcast digital signals than analog, and all those analog airwaves are worth untold billions of dollars.

So it's in Uncle Sam's best interest to ensure that the switchover happens, and the best way to do that is to do the heavy lifting (financially) for those who still love their rabbit ears.

Here's the funny part though (funny as in "oh geez not again," not "hah hah" funny): to get one of these $40 coupons from Uncle Carlos (AKA Commerce Secretary Gutierrez), all you have to do is ask.

Even if you don't need one, you can still go to a special National Telecommunications and Information Administration Web site starting Jan. 1, 2008 and request up to two $40 coupons per household. (Each converter will be about $50). The best part is this: if the initial $990 million in coupons runs out, the NTIA can ask Congress for $510 million more.

The housing market got some more bad news recently. A new report from the Commerce Department Nov. 17 reported a dramatic decline in the construction of new single-family homes and apartments during October.

According to the report, construction of new single family homes and apartments fell 14.6% from their September level to an annual rate of 1.486 million units. The market has not seen a percentage decline this steep for the last 19 months; we're not back to the activity levels of July 2000.

We are still going to have to play the waiting game to find out if the housing slowdown is going to be enough to pull America into a recession, but it is surely going to be something to contend with over the next year. We have already started to see the impact during July through September when economic growth came in at a 1.6% percent rate. The weakening housing market was blamed for shaving a full percentage off the rate.

But on a brighter note, the report indicates that builder sentiment has risen for the last two months -- so hopefully we are seeing at least a leveling-off in the housing market, and we are not looking ahead towards a more dramatic downside. However, new building permit applications fell again for the eighth straight month by 6.3%.

This year's activity during October was 27.4% lower than October last year, mostly led by a weakening in the South which saw new construction fall 26.4%. The Midwest had a drop of 11.7% and the West fell 2.1%. The situation in the Northeast was the anomaly, where new construction was on the rise, with an increase of an impressive 31%.

Michael Fowlkes has worked as a stock trader for seven years and spent the last 2 years working as an analyst and portfolio manager for the online investment advisory service Investor'sObserver.

The Commerce Department reported today that personal income was up 0.5 percent, slightly higher than August's revised 0.4 percent, but personal consumption slowed to just 0.1 percent in September, less than the revised 0.2 percent for August. These numbers are exactly the opposite what many economist were expecting. Economists expected to see a 0.4 percent increase for personal income and a 0.2 percent increase for consumer spending.

This report reflects the trend we saw in last week's GDP report from the Commerce Department which showed that economic growth was the weakest in three years. It also reinforces the Fed's decision to hold short-term interest rates steady amid signs that the economy is slowing.

Spending on durable goods -- those designed to last three years or longer -- increased by 1.6 percent, which is much better than August's 1.4 percent decline. But spending on non-durable goods declined by 1.2 percent after gaining in August by 0.2 percent.

Personal savings continues to be in the negative with a drop of 0.2 percent. That's now 18 months that savings has been in the red. I suspect personal income growth would need to increase much more dramatically to see the savings rate turnaround.