Economic numbers paint bleak picture
Economists finally declared what most Americans already knew from daily life: the United States is in a recession.
What is more surprising is the fact that the nation has been in recession since December 2007, according to the National Bureau of Economic Research (NBER).
The declaration of a recession was made despite the fact that the United States hasn’t experienced two consecutive quarters of negative growth — the popular perception of what technically constitutes a recession. NBER based its determination on the dramatic drop in the labor market, real personal income and industrial production as well as wholesale and retail sales. The loss of 1.2 million jobs this year was the biggest determining factor in the NBER’s assessment.
The United States is poised for one of its deepest economic downturns considering that only two other recessions in U.S. history have lasted a year or more, and many analysts do not see a turnaround until late the second half of 2009 or 2010.
Meanwhile, the Institute for Supply Management reported that the manufacturing sector significantly weakened between October and November and is experiencing price deflation. Manufacturing failed to grow for the fourth consecutive month, with new orders contracting for 12 consecutive months to their lowest level in 28 years and order backlogs at their lowest level since January 1993. Commodity prices continue to decline and are at their lowest level in 60 years.
Manufacturers are seeing contraction in most areas of business activity, including new orders, production, employment, inventory, exports and imports. ' Eric Kulisch