Fed Says Recession Started Last Spring

Remember last spring when the Bush administration and Fox news kept saying that the nation was not in a Recession, and that it was all symantics, and the fundementals of the economy were strong. Guess those of us who actually were paying attention were right. It now turns out that the U.S. economy did fall into a recession last spring. And the expectation is that the U.S. economy will contract sharply this quarter as more than 200,000 workers per month are added to the rolls of the unemployed.

The Philadelphia Federal Reserve's latest Survey of Professional Forecasters removed any doubt with the survey that was released today. I have been amazed that there are some people who still want to deny that this nation is in a recession, even as corporate spending has collapsed.

The Philadelphia Fed's survey said the U.S. economy entered a recession in April and that it will last 14 months. It predicted gross domestic product would shrink by 2.9 percent in the fourth quarter, a sharp downgrade from the previous prediction of 0.7 percent growth.

The survey predicted the economy would shed an average of 222,400 jobs per month this quarter, versus the previous forecast of a loss of 45,400 per month. The survey said first-quarter GDP would decline by 1.1 pct and the unemployment rate would hit 7.0 percent during the first three months of next year.