WASHINGTON (MarketWatch) -- You know the economy is in trouble when you have to go back to Herbert Hoover's administration for an historical comparison, or when the Federal Reserve cuts interest rates to 50-year lows, or when you run out of adjectives to describe how awful home building is.

We could see all of those in the coming week's economic data, (especially if I can't find my thesaurus). The calendar starts off with the Fed meeting on Monday and Tuesday, and wraps up with the weekly jobless claims data on Thursday. In between, we'll get the latest on consumer prices, industrial production and home building.

"The week's economic data should be lousy with stark recessionary readings across the board," warned economists for Citigroup Global Markets. See Economic Calendar.

The Fed

Looked at one way, the Federal Open Market Committee meeting will have all the suspense of yesterday's newspaper.

Almost everyone expects the FOMC to cut its target for overnight interest rates from 1% to 0.50%, but almost no one thinks the rate cut will do much good in the current environment of fear and risk aversion. Households and businesses aren't borrowing because interest rates are too high; they aren't borrowing because they are afraid the recession will worsen, and because they can't get a loan from banks that are even more afraid than they are.

Looked at in a slightly different way, the Fed meeting could be an important milestone in the central bank's history. In a speech he gave more than six years ago, Chairman Ben Bernanke laid out all the nontraditional methods he'll be using this year and next to fight the credit squeeze and escape from the liquidity trap.

The two-day meeting, Bernanke will try to get the rest of the committee formally on board with his strategy, which will be more and more focused on what's called quantitative easing.

"We look for the accompanying statement to highlight that the main nexus of policy in the coming months will be quantitative easing operations, and we expect these operations to be aimed at lowering borrowing costs for households and businesses," wrote Dean Maki, economist for Barclays Capital Management.

What exactly is "quantitative easing"? Simply put, it's an attempt by the Fed to flood the financial system with so much cash that some of it will have to be lent out. The Fed would do that by "purchasing long-term Treasuries and agency debt and possibly financing a wider range of asset-backed securities," said economists for BMO Capital Markets.

At some point, all that loose cash would begin to be inflationary, and that's the whole point. The Fed is trying to avoid a sustained drop in asset prices that could leave every borrower under water. Eventually, the Fed will have to mop up all that money, but as Bernanke said, that's a worry for another time.

Inflation

The Fed has nothing to fear now about consumer price inflation.

On Tuesday, the Labor Department will report on the November consumer price index. With gasoline prices falling another 30% or so, economists surveyed by MarketWatch expect the CPI to fall 1.4% after a 1% drop in October.

A decline of 1.4% would be the lowest since 1938, and if it falls even a tenth more than expected, it would be the lowest since February 1933, when Hoover was packing his bags to leave the White House.

If prices do drop 1.4% in November, the increases in consumer prices over the past year would dip to 1.3%. By next summer, according to CIBC economist Meny Grauman, year-over-year inflation will turn negative for the first time since the mid-1950s.

Falling prices is surely good news for consumers. But the cause of the disinflation is the global economic slump, which is certainly not good news for anyone tied to the globalized economy.

The other data

Jobless claims will be closely watched on Thursday after they hit a 26-year high last week. The data cover the survey week for the monthly employment report, so the initial and continuing claims data could provide an early clue about December payrolls.

Home building has fallen to the lowest levels at least since 1959, but that doesn't mean it can't fall some more. Our survey says housing starts should drop about 7% in November to a seasonally adjusted annual rate of 738,000. That's beyond bad.

"The housing construction freefall continues unabated," said Citigroup economists. "In fact, housing market indicators actually appear to have started another, steeper down leg in recent months."

Industrial production likely fell 0.6% in November after a 1.3% gain in October that was largely due to a rebound from the hurricane damage of September. Manufacturing payrolls dropped by 85,000 in November, and hours worked plunged 1.4%, so it's likely that output also dropped sharply.

Forward-looking indicators on the factory sectors in the New York and Philadelphia regions are likely to sink further, economists said.

"The outlook for the U.S. industrial sector is bleak," wrote CIBC's Grauman. "A global economic recession means that demand is not only sluggish at home, but also abroad." And let's not forget that the auto industry is hanging by a thread.