The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. - David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report - which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation - "strongly suggests that an official recession has arrived." - In a report dated Monday, Rosenberg outlined several data markers that he says are unequivocally associated with recession. - "At no time in the past 60 years has the unemployment rate risen 60 basis points ... from the cycle low without the economy slipping into recession, and here we now have the jobless rate hitting five per cent in December versus the [March 2007] trough of 4.4 per cent," he argues. - Rosenberg also cites figures on aggregate hours worked in the economy. They contracted at an annual rate of 0.4 per cent in the fourth quarter, following a 0.6 per cent decline in the third quarter. - "Back-to-back declines in total hours worked have always been associated with recession," he said. - An official declaration of a recession could be a long time coming, however. The recession dating committee at the U.S. National Bureau of Economic Research (NBER) waits for conclusive evidence, including revisions, so it may be least two years before an economic downturn is officially pronounced, Rosenberg said. - But the head of the NBER doesn't think the U.S. is into a recession just yet. - "I think we're not in a recession now," Martin Feldstein told CNBC. But he said there is a "serious risk" of a downturn. After the U.S. jobs report came out last Friday, he said the odds of a U.S. recession were now greater than 50 per cent. - A recession has been traditionally defined as two consecutive quarters of economic contraction. However, NBER's definition is broader. It says a recessi...
The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch....
