MercoPress. South Atlantic News Agency

It's official: US has been in recession since December 2007

The US National Bureau of Economic Research said Monday that the US has been in a recession since December 2007. The NBER said that the deterioration in the labour market throughout 2008 was one key reason why it decided to state that the recession began last year.

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. According to the available data employers have trimmed US payrolls by 1.2 million jobs in the first 10 months of this year. 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. The current US 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." The recession confirmation follows on a string of bad news: US manufacturing activity fell in October to its lowest level for 26 years, according to the latest report from the Institute for Supply Management. The report cited "significant demand destruction", for the third consecutive month in which the sector contracted. October's score is the lowest-recorded since September 1982. Every sector surveyed, apart from clothing and electronic products, reported a contraction for the month. October car sales also were negative: General Motors sales were down 45% compared with October 2007. Chrysler's sales fell 35% and Ford's dropped 30%. Overall, 838,156 vehicles were sold in October, down 32% and the worst figures since January 1991, according to Autodata. Meanwhile, US construction spending in September fell 0.3%, according to figures released by the US Commerce Department - less than the 0.8% fall that many analysts had been expecting. The Commerce Department also indicated that US consumer spending fell by 1% in October, the largest decline since September 2001. Meanwhile, new orders of durable goods - goods intended to last for at least three years - fell by 6.25% in October. The Commerce Department also said that the pace of new home sales in October fell to the lowest rate for 17 years. Sales dropped by 5.3% to a seasonally adjusted annual rate of 433,000, the lowest rate since January 1991. Other figures released last week showed that the number of new jobless claims last week fell to 529,000 from a 16-year high of 543,000 the week before.