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This paper describes the current state of the U.S. economy and provides general and statistical information on forest products markets in terms of production, trade, consumption, and prices. Market developments are described for sawn softwood, sawn hardwood, softwood log trade, wood-based panels, paper and paperboard, fuelwood, forest product prices, and housing starts. Policy initiatives that can affect domestic markets and international trade in wood products are also discussed in some detail. Data are provided through the end of the year 2008 with forecasts through 2009.