Tuesday, 8 April 2008

NBER Chief says US in Recession

Martin Feldstein is chief at the NBER - the organization that will ultimately decide if the US has entered a recession. A couple of months ago Feldstein wrote a piece in the WSJ warning that Fed rate cuts wouldn't work in trying to prevent a recession, something I've expressed here numerous times. Now Feldstein believes the US economy is already in a recession.

NBER's Feldstein says U.S. sliding into recession

Martin Feldstein, who leads the group that is considered the arbiter of U.S. recessions, said on Monday that he personally believes the economy has been sliding into a recession since December or January.

"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television.

Feldstein said he believes that the recession will linger. "I think it could go on longer" than the "last two recessions (which) lasted eight months peak to trough," he said, adding the current recession could last about twice as long.

He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year.

The NBER, a non-profit research organization, typically declares start and end dates for U.S. recessions. The group has not officially declared the U.S. is in a recession.