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More Leading Economists Say US Is Now In Recession
Will the White House and the Treasury be the last in the country to admit the downturn?

Steve Watson
day, March 10, 2008

More leading economists have conceded that the US economy is now in recession after figures, released on Friday, revealed a second successive monthly fall in employment.

The Labor Department figures show that the number of people laid off in the last month is at its highest for five years with 63,000 cuts.

The figures would have been worse still had a 38,000 increase in government jobs not been factored in.

The Times of London reported Sunday that the figures have "sealed the question of whether America had entered its first recession since the 2001 downturn."

"The most striking figure in the whole report is that private sector payrolls shrank by 101,000 last month compared to a modest 26,000 drop in January," said Paul Ashworth, senior US economist at Capital Economics.

"A decline of that magnitude screams recession...The debate is over,” Ashworth told the Times.

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Other leading economists have had the following to say on the matter:

  • “A terrible report” that signals “no support at all now for consumer spending growth” - Joshua Shapiro, economist at MFR

  • "Turn out the lights the parties over. We are in a recession." - Joseph Brusuelas, IDEAglobal

  • "The debate should no longer be about whether there is or is not a recession, only about how deep it will be." - Nigel Gault, Global Insight.

  • “All the lights are flashing red... We’re in a recession. I don’t think there is any doubt about it at this point.” - Nariman Behravesh, chief economist at Global Insight.

  • “On the basis of the available evidence, I would say we are in recession." - Martin Feldstein, former head of National Bureau of Economic Research, the body that is regarded as the official arbiter of whether America has entered a recession.

  • “We now think the economy can be described as having entered a recession in early 2008.” - Bruce Kasman, chief economist at JP Morgan.

  • “The economy is currently in recession. I believe we are facing the most serious combination of macroeconomic and financial stresses that the US has faced in a generation - and possibly, much longer than that.” - Larry Summers, the former US Treasury secretary.

  • “We now believe the tax-rebate cheques will arrive too late to prevent an outright recession. We look for modestly negative GDP growth in both the first and second quarters of 2008." - Ethan Harris, chief economist at Lehman Brothers.

The technical definition of a recession in macroeconomics is when there is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.

Last month the Commerce Department reported that the gross domestic product barely increased at a low 0.6 percent pace in the quarter that ended Dec. 31.

The latest economists join America's most famous investor, businessman and philanthropist Warren Buffett in their opinion on the recession.

Buffett told reporters last week that "by any commonsense definition, we are in a recession."

In addition, a recent survey by the National Association for Business Economics revealed that 45 percent of economists are predicting a recession in 2008.

Last week economists from HSBC and AIG, two of the world's leading banks, warned of recession and hit out at the 'authorities' lack of action, stating that the 'shadow banking system' may be in danger of a complete collapse.

The former chief economist of the World Bank, Joseph Stiglitz, has also said that he believes the US economy is probably already in recession.

Meanwhile, The White House continues its policy of "if we don't say so, it's not reality" by continuing to insist the economy is not in recession.

The corporate lapdog media naturally follows suit with headlines such as Economists Disagree on Whether the Country Actually Is in a Recession.

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