Why is 2008 starting to feel like déjà vu?

So far, New Year's on Wall Street has done little to douse last year's smoldering recessionary sentiment, and next week's earnings news, economic data and Federal Reserve speakers are likely to fan the flames.

The new year began with a slew of economic data that, for many economists, pointed to recession. Telltale signs included a contracting manufacturing sector and a dramatic jump in unemployment. But the weakness also pushed open the door for the Fed to continue lowering interest rates -- a path that market participants thought might have been abandoned when oil prices hit $100 per barrel last week.

"The risk of recession is rising sharply," writes Nigel Gault, U.S. economist at Global Insight. "At least a 25-basis-point rate cut by the Fed on Jan. 30 is a cast-iron certainty, and a 50 basis point move is now a strong possibility," he continues.

Friday's report of less-than-robust nonfarm payrolls appeared to embolden recession forecasters. The Labor report indicated that the credit crunch had taken hold in the labor market. Just 18,000 new jobs were added in December, while private sector employment declined by 13,000 jobs -- the first such decline since 2003. The unemployment rate also jumped to 5% from 4.7%, its largest leap in one month since the 2001 recession, according to Global Insight.

On the heels of the jobs news, the market appeared to bake in additional fed funds rate cuts. The odds of a 50-basis-point cut at the January Fed meeting jumped to 64%, from 34% on Thursday, according to Miller Tabak.

The Fed's vice chairman, Donald Kohn, spoke on Friday but refrained from commenting on the economy or the outlook for interest rates. But in the coming days, other Fed officials may offer more substantial guidance.

Next week, U.S. Treasury Secretary Henry Paulson speaks Monday with Atlanta Fed President Dennis Lockhart, while Philadelphia Fed President Charles Plosser and Boston Fed President Eric Rosengren speak on Wednesday. Rosengren dissented at the Dec. 11 meeting, favoring a 50-basis-point rate cut rather than the 25-basis-point cut the Fed enacted. Fed Chairman Ben Bernanke takes the stage Thursday.

Next week's economic data will perhaps be less explosive than last week's. Key reports include Tuesday's pending home sales, and the trade balance, due Friday.

But recession harbingers and rumors of further Wall Street layoffs will likely linger as earnings season begins in earnest next week. Any profits are unlikely to resuscitate economic hopes. Alcoa ( AA) kicks things off Tuesday with its fourth-quarter earnings report after the closing bell. The aluminum producer is actually quite a drag on earnings estimates for the materials sector, which is expected to mark an 8% decline for the fourth quarter, according to Thomson Financial .

The weakest earnings this quarter come from the financial sector, which analysts believe will see aggregate profits decline a whopping 66% in the quarter.

The S&P 500 companies overall are expected to turn in a second consecutive quarter of declining earnings, logging a 9.5% drop, says Thomson analyst John Butters. Third-quarter earnings fell 4.5% from the same period in the prior year.

Thursday brings the kickoff of bank earnings, with Buffalo-based regional M&T Bank ( MTB) announcing its fourth-quarter results.

The larger banks' earnings begin the following week, however, where warnings are already looming from at least 16 banks , including Wells Fargo ( WFC) and Washington Mutual ( WM).

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In keeping with TSC's editorial policy, Rappaport doesn't own or short individual stocks. She also doesn't invest in hedge funds or other private investment partnerships. She appreciates your feedback. Click here to send her an email.