http://money.cnn.com/2008/12/01/news/economy/recession/index.htm?postversion=2008120112

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It's official: Recession since Dec. '07
The National Bureau of Economic Research declares what most Americans already knew: the downturn has been going on for some time.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: December 1, 2008: 5:40 PM ET


NEW YORK (CNNMoney.com) -- The National Bureau of Economic Research said Monday that the U.S. has been in a recession since December 2007, making official what most Americans have already believed about the state of the economy .

The NBER is a private group of leading economists charged with dating the start and end of economic downturns. It typically takes a long time after the start of a recession to declare its start because of the need to look at final readings of various economic measures.

The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began last year.

Employers have trimmed payrolls by 1.2 million jobs in the first 10 months of this year. On Friday, economists are predicting the government will report a loss of another 325,000 jobs for November.

The NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said.

In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession in the general public.

Many people erroneously believe that a recession is defined by two consecutive quarters of economic activity declining. That has yet to take place during this recession.

This downturn longer than most
The NBER did not give any reasons or causes of the recession. But it is widely accepted that the housing downturn, which started in 2006, is a primary cause of the broader economic malaise.

The fall of housing prices from peak levels reached earlier this decade cut deeply into home building and home purchases. This also caused a sharp rise in mortgage foreclosures, which in turn resulted in losses of hundreds of billions of dollars among the nation's leading banks and a tightening of credit.

The current recession is one of the longest downturns since the Great Depression of the 1930's.

The last two recessions (1990-1991 and 2001) lasted eight months each, and only two of the 10 previous post-Depression downturns lasted as long as a full year, according to the NBER.

In a statement, White House Deputy Press Secretary Tony Fratto said that even though the recession is now official, it is more important to focus on the steps being taken to fix the economy.

"The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus," he said. "Addressing these areas will do the most right now to return the economy to growth and job creation."

President-elect Obama's transition team did not have an immediate comment on the recession announcement. But other top Democrats said this is further proof of the need for another economic stimulus package, which Obama has advocated.

"With rising costs of living, rising unemployment, record foreclosures and depleted savings, we must do more to help families make ends meet," said Senate Majority Leader Harry Reid in a statement. "With the cooperation of our Republican colleagues, we intend to send a plan to the White House as soon as possible following President-elect Obama's inauguration next month."

How long will it go?
Nonetheless, several economists said the real concern is that there is no end in sight for the downturn.

Some suggested that the best case scenario for the economy is that it would reach bottom in the second quarter of 2009. And even if that happens, that would still make this recession the longest since the Great Depression.

Rich Yamarone, director of economic research at Argus Research, said the only good news for the economy is that some of the steps already taken by the government earlier this year could start to spur growth soon. For example, he said interest rate cuts by the Federal Reserve, which started in September 2007, "should be working their magic any day now."

In February, Congress passed a $170 billion tax rebate meant to stimulate the economy. But that only boosted GDP during the second quarter.

The financial market and credit crisis worsened during this summer, prompting Congress, the Treasury Department and the Fed to pump trillions of dollars into the economy through a variety of programs, including a $700 billion bailout of banks and Wall Street firms and hundreds of billions of lending by the Fed to major companies and lenders.

But Lakshman Achuthan, managing director of Economic Cycle Research Institute, said that at this point, the only solution for the recession is time.

"All the hand waving and real cash that policymakers are throwing at the problem won't change the fact we're stuck in this nasty recession," he said. "The ultimate cure of a recession is letting it run its course."

Achuthan's research firm tracks weekly leading economic indicators that are supposed to signal a change in direction for the economy four or five months ahead of time. Those indicators are continuing to fall at a record pace.

Still, he said he's not worried about the current recession turning into a depression, as many Americans fear.

"Even with indicators in a tailspin, this still is only a very severe recession," he said. "There's lots of gloom, but we don't see doom."

Can anybody explain to me why gas was driven up to $4 a gallon in the midst of a recession?  I am no economist, but if we were told in June, July and August that gas prices were $4 a gallon because of the world demand on the oil supplies, and this new information contradicts all those previous explanations.  

How can energy demand be high 6 months into a recession?  That would be an oxymoron.  

I have my own theory's as to how this occurs and it's extremely cynical.  First I believe that the average citizen was lied to.  Not just by our government, but by those in the media, along with those who manage the billions of dollars in 401K's.  I don't place the blame completely on these institutions, I also blame the individuals who were led like cattle to the slaughter house. Including myself.  I, like the sheeple that most Americans have turned into, believed those business moguls, investment bankers, and fund managers, who have been telling us through media punditry and educational institutions, that if you dump a percentage of your pay into the stock market via 401K, it would be the best thing for you, the average working stiff, and you'll retire a millionaire.  Turns out that those in the business of managing our money have a lot more to gain by turning a blind eye to this mounting crisis out of their own personal greed.  Continually investing our money into businesses, regardless of the economic climate.  

So who were the ones driving up oil to $140 a barrel in mid June of 08'?  That would have been 6+ months into now what we know to be a recession. Obviously there wasn't a demand to justify it.  

My suggestion is that all those in the working class who were told to invest into a 401K pull their money out and put it in the bank.  And if not that, at least pay attention to the stocks you hold and the CEO's salary of the companies you hold stock in.  Stockholders determine how much the CEO and those sitting on the board of directors gets payed, and they depend on the billions of 401K money to continually fund their company. If the working person payed more attention to the performance of individual stocks and the CEO's compensation, instead of leaving it up to their fund managers, maybe then would we see CEO salaries come down to a reasonable amount.

We need to stop being led around and told what's good and bad for us.  Americans need to wake up, and realize what is going on, and make common sense decisions. We need to take control of our own destinations.  Not leave it up to somebody else or some institution, and then blame the institution when things go wrong.

Cicero

Their crystal ball is broken or needs batteries.......there is a war, sanctions, power struggles, greed etc, etc,,,,,,,,,,need gas? Throw a human into the mix
and instead of gas we have an a**.........

First of all, Cicero, I can't say that gas hit $4 per gallon specifically because we were in a recession, or that it was something that had an effect, but I would say that the fact that gas was $4 a gallon and the fact that we are in a recession go right together.  It's because the value of the dollar has been blown up so much that it's worth so little, buying less, therefore costing more dollars per item (in this case, a gallon of gas).  Remember, we're no longer at the same prices we used to be for many things.

As for the question of how can energy prices be so high 6 months into a recession, it's because of the fact that there's so much money out there that it simply costs more to buy the things now.  

Also, let's remember the definition of a recession and why we're only able to use this word now...because it takes a specific amount of time and looking back at results (geenerally 6 months to a year or more) to define the difference between a simple downturn / business cycle or to have the constant decline which is actually the definition of a recession.  

One definition of recession from dictionary.com is listed as "the state of the economy declines; a widespread decline in the GDP and employment and trade lasting from six months to a year. "

So, even if we were in it for a while, it just takes time to get the official tagging, although you could say that when we saw the $4 gas we could have already known we were in a recession.

Kevin, do you really believe that inflation of the dollar, supply or demand caused oil prices to fluctuate 50% over 1 quarter?  Oil was over $100 dollar per barrel in September, now hovering somewhere around $50 in late November early December.  Did oil producers find more oil?  Did demand drop by 50%? Has the worth of our dollar deflated by 50%?  Or were the markets rigged by pension fund and hedge fund managers who manage the kind of money that can influence sectors of the market?  Grocery prices haven't gone down with the declining energy costs, and I ask, why not?  We were told prices of groceries were going up due the cost of diesel fuel do get the product to market, and other petroleum based products in packaging.  Well, oil is down over 50% from 6 months ago, where's the savings at the supermarket?  

I am a free market capitalist, but these markets are far from free.  One example of that are authorities like the Metroplex, dictating who does business in the county at a reduced risk, and creating a false supply side of the market through government subsidized businesses.  Would Metroplex Board Member Neil Golub give a 0% interest loan to another supermarket chain to build stores in Schenectady County?  OF COURSE NOT!  When you are one of the richest and most influential men in the County, you can do that.  And that is just a microcosm of what goes on nationwide.  

Americans have been lulled into this false sense of security and trust, that those corporations controlling our retirements are looking out for our best interest, or those in the government are doing the same.  But the fact is that whether it be a large retirement fund manager like Fidelity, or those in Government promising Universal Health Care, or Social Security, it just gives those running those institutions more money and power to do as they see fit.  And greed and the lust for power usually force those running those institutions to protect the institution and their positions of power, and quite often at the expense of those they are meant to serve.  

After all,  those banks that were managing those billions of dollars in retirement accounts, just received a $700 billion of taxpayer money for their failures.  God Bless the U.S.A

I already pulled my money out of my 401K, paid the penalty and put it in the bank. (And some at home )

We have all been on the 'other side of the hedge' for a long long time.......


grocery costs are up just like education costs are up.........

keep the folks worrying about their bellies and the 'luxury' of education is far behind......

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Meats for the belly, and the belly for meats: but God shall destroy both it and them. Now the body is not for fornication, but for the Lord; and the Lord for the body.