Inflation slowed to a half-century low this past year and industrial output fell for the first time since 2002, data showed on Friday, as the recession deepened toward year-end, raising the specter of deflation.

With consumer confidence remaining at depressed levels, the reports suggested the economy could take longer to pull out of a downturn that is on track to be the longest and possibly deepest since World War Two.

“We seem to be digging an economic hole of major proportion which will only add time to the turnaround,” said Kevin Giddis, head of fixed-income sales, trading and research at Morgan Keegan in Memphis.

Maybe it still is and noone knows what going on. Usually I would not leave in these negative words but I do to illustrate the “yah, but” nature of soothsayering the economy.