WASHINGTON, Dec. 1, 2008
It's Official: U.S. In Yearlong Recession
Economy Fell Into Recession In December 2007, National Bureau Of Economic Research Says
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The NBER — a private, nonprofit research organization — said its group of academic economists who determine business cycles met and decided that the U.S. recession began last December.
By one benchmark, a recession occurs whenever the gross domestic product, the total output of goods and services, declines for two consecutive quarters. The GDP turned negative in the July-September quarter of this year, and many economists believe it is falling in the current quarter at an even sharper rate.
But the NBER's dating committee uses broader and more precise measures, including employment data. In a news release, the group said its cycle dating committee held a telephone conference call on Friday and made the determination on when the recession began.
The White House commented on the news that a second downturn has officially begun on President George W. Bush's watch without ever actually using the word "recession," a term the president and his aides have repeatedly avoided. Instead, spokesman Tony Fratto remarked upon the fact that NBER "determines the start and end dates of business cycles."
"What's important is what is being done about it," Fratto said. "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."
Many economists believe the current downturn will be the most severe since the 1981-82 recession. The country is being battered by the most severe financial crisis since the 1930s as banks struggle to deal with billions of dollars in loan losses.
The Bush administration won approval from Congress on Oct. 3 for a $700 billion rescue package for the financial system. Bush said in an interview with ABC's "World News" to be aired Monday that he would support additional intervention if necessary to end the recession.
"I'm sorry it's happening, of course," Bush said, referring to a global financial crisis that has eliminated millions of jobs and damaged retirement accounts.
Federal Reserve Chairman Ben Bernanke said Monday that further interest rate cuts were possible but he cautioned that there were limits to how much such action will be able to revive an economy expected to remain weak well into next year.
"Although further reductions ... are certainly feasible, at this point the scope for using conventional interest rate policies to support the economy is obviously limited," Bernanke said in a speech to business executives in Austin, Texas. The Fed is widely expected to cut a key interest rate when officials next meet on Dec. 15-16.
Treasury Secretary Henry Paulson also was scheduled to give a speech Monday providing an update on how the government's rescue efforts are working to deal with the economic distress.
Two new reports provided a grim snapshot of how steep the economic slump is becoming. The Commerce Department reported Monday that construction spending fell by a larger-than-expected 1.2 percent in October, while the Institute for Supply Management said its gauge of manufacturing activity dropped to a 26-year low in November.
The GDP contracted by 0.2 percent at an annual rate in the fourth quarter of 2007, but that that drop was followed growth in the first two quarters of this year, partially boosted by the distribution of millions of economic stimulus payments.
However, employment, one of the measurements tracked by the NBER, has been falling since January.
The NBER decision means that the economic expansion lasted from November 2001 until December 2007. Economic expansions peak and recessions begin in the same month, according to the NBER's dating methods. Founded in 1920, the NBER has more than 1,000 university professors and researchers who act as bureau associates, studying how the economy works.
The decision on the recession means that during the eight years that Bush has been in office, the country has seen two recessions. The first downturn lasted from March 2001 until November of that year.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
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See all 97 CommentsYou can read about it here:
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19/business/19cisneros.html?scp=1&sq=cis
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Posted by Abrame at 03:23 AM : Dec 02, 2008
Since 1994, Clinton had a Republican dominated Congress. In fact, until 2006, Repubicans controlled Congress. Face it---these are net results of Republican control and governance. 14 years of dominance has yielded these results. Almost all deregulation was authored by Republicans. That is a fact.
Second all are to blame not just Republicans.
Posted by kevinkkloste at 04:35 PM : Dec 01, 2008
Collective blaming will not save one job, or roll back the price of anything or create more money. But....stopping spending of 500 million/day on a war that was based on lies would at least slow down the hemorrhage a little.
Bush failed to act against the program, but if he had he would have been labled a racist anyway since the program was intended for inner cities and couldn''''t be stopped till it blew up.
Now we have Obama hiring the very people who engineered this fiasco, promising trillions in bailouts and cash, while pointing a very crooked finger at Bush.
Keep in mind that Obama has promised government intervention in the banking, energy, healthcare, and education sectors while promising to expand the Afghan war. Simply sounds like more of the same - same politicians, same lies, same disasters.
Posted by despido at 03:48 PM : Dec 01, 2008
..And it has NOTHING, (you repeat, NOTHING) at all to do with Bush spending over 500 million dollars a DAY for a war based on lies, or due to outsourcing, or due to oil companies making record profits each quarter while we paid 2 -5.00/ gal for gas and nothing due to inflation causing food to go up over 400% in price so that people could not afford to pay for housing AND food and had to choose--nope...nothing at all to do with outsourcing jobs and insourcing illegal and quasi legal replacements for American workers--and telling Americans to "spend, spend, spend" to save a farce of an economy, huh?
Posted by cbscrash072 at 01:54 PM : Dec 01, 2008
Do us all a favor. Hold your breath until the "quick turn around" No cheating. When they come to get your corpse, we will change the meaning of dead so you will not really be dead, okay? :)
Posted by cbscrash072 at 01:54 PM : Dec 01, 2008
People tailor "definitions" to suit their ends. It would be like the government making up a new definition for dying--it might look good on paper and help skew the results for the stupid--but the dead would still be stacking up just the same. Due to manipulation of data, ignoring or discounting the unemployed, making up new categories for underemployed, etc--what you are saying is that the ways to keep the shell game going just ran out--and the government has finally admitted this--the fact is a "definition" does not mean squat. It was just the manipulation of data. We have been trending towards recession since 2004. The fake stock market games, and rampant spending by an ignorant credit crazy public just hid that fact longer.
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posted by faletinme
Vetoes before Americans tired of Republican BS and gave Congress to the Democrats: 1
Vetoes after Democrats took over: 10+
Republicans shouldn''t blame Congress for Bush''s stupidity. If Bush stopped vetoing reasonable legislation, much needed progress would be made.
Fortunately, the Republicans weren''t bright enough to realize this, and their lousy candidates (including Caribou Barbie!) got the pasting they deserved.
Now that we will have an intelligent Liberal in the Oval Office, and a near fillibuster proof majority (obstructionist Republican''s last hope) - progress will be made.
p.s. Who said "I can do for healthcare what I did for Wall Street!"
Yes, you guessed it - Mr. Deregulation himself - John "Bottom Gun" McCain.
How stupid can Republicans get? They still don''t get it. Deregulation in the face of greed breeds disaster.
The Bush/Hannity/Limbaugh-Depression might have started December of 2007 but the ''real economy'' has contracted since between 1967-1968.
That will be so obvious as this fake ''bubble-debt-based-economy'' finally unravels and reveals a hollowed post-industrial wasteland of empty gas-stations, shopping-mall parking lots, and shut-down auto-plants.
I lived in a 3rd world country before and trust me folks this will look worse then Beirut and Katrina combined with nothing but trash lying everywhere.
A ''nuclear-debt-bomb'' has just exploded and blew-up our economy. It was packed with 50 tons ''trickle-down'' TNT and ''globalization'' nonsense composed by the formula that ''service-sector-consumer-led'' economy was perpetual and good for America.
What a gaggle of losers and idiots that have ran this country down into the dirt for the last 8 years.
Simply ridiculous.
Congress, lead by Barney Frank and Chuck Schumer, pressured mortgage lenders to relax their standards so that the Democrat Populist Claim that it is EVERY Americans "RIGHT" to own a home might appear plausible.
We endured a war, needlessly prolonged by backseat Congressional haranguing as Dems fell over themselves to demonstrate their overwhelming compassion for a dozen or so guys lying on top of one another at Abu Gharib .
The Dems next parlayed the loss of 10 jobs (9 Fed Proecutors and Ms Plame) into a sidehow while they ignored the other million citizens losing THEIR jobs.
Now the democrats in congress have voted to throw a trillion or so of taxpayer money to support the very banking institutions they helped push to the brink of failure!
Get used to it folks. I warned you when you elected these clowns to congress. I warned you when you went hogwild for "unspecified CHANGE". Too bad that referred to the CHANGE that will be left in your retirement account.
PT Barnum said: "Nobody went broke underestimating the intelligence of the American public". Clearly, he was right. So quit your complaining and reap the misery you have sown, Dems!
Bu$h did it.
NeoCons helped.
Republicans aided and abetted.
I guess that explains why Obama back peddled on his repeal of the Bush Tax cuts and the withdrawing of the troops in Iraq."
Posted by ivotedright
Actually, Obama even today reiterated his pledge to get the troops out of Iraq in 18 months, although he will speak with top military brass first (as a reasonable person should).
And Obama has bigger fish to fry before considering a repeal of the tax gift to the wealthy, which will expire in less than two years regardless.
I guess you could say Bush successfully saddled Obama with so many problems, he has to let some of the smaller injustices fix themselves over time as he tackles the major issues.
Bush will be remembered in a light similar to Herbert Hoover in the pre-depression days, as a FAILURE.
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Posted by gce65 at 06:30 PM : Dec 01, 2008
I guess that explains why Obama back peddled on his repeal of the Bush Tax cuts and the withdrawing of the troops in Iraq.
Everyone should return their purchases and save your money in a mattress and hunker down. Bush and his cronies aren''t saying the "R" word, because the economy is so dire if they are honest they fear utter collapse.
They are so inept and terrified of their own mess they won''t be honest with the public. So, you should assume the absolute worst.
Neither Bush or his cronies like Paulson can even utter the "R" word. They''re like kindergarten kids too hapless to face reality.
No offense to any kindergarten kids out here.
So another year from now, are they all going to say that we''ve been in a full-blown depression that started NOW?
ANY business that takes that long to diagnose it''s own problems is doomed to fail...
And then we all look around at each other in surprise... amazing!
boosh = war and economic catastrophe, world hate.
Even before 9-11, when boosh was set in place by the Supreme Court, despite the other candidate getting more votes. We all knew it would end like this.
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