Fed Survey Says US in Recession Since Last Spring

The Philadelphia Federal Reserve's latest Survey of Professional Forecasters reported that the U.S. economy fell into recession last spring and will contract sharply this quarter as more than 200,000 workers per month are added to the rolls of the unemployed.

Published on November 17, 2008

The survey removed some of the glow from an earlier report showing industrial output rebounded in October after hurricane disruptions produced a stunning fall in September.

Early data from the factory sector also supported the grim view of the forecasters, showing manufacturing in New York state tumbled in November to yet another record low.

Japan Monday joined the euro zone in recession.

Although the U.S. economy contracted in third quarter, that followed two consecutive quarters of growth, albeit helped by government stimulus payments.

The arbiter of U.S. business cycles has not yet declared the economy in recession, generally defined as two consecutive quarters of contraction.

The latest data and surveys provided new evidence that turmoil in credit markets was tightening its grip over the economy, which is unlikely to seen any relief soon from the worst financial crisis since the Great Depression.

"The early signs suggest that the November data cycle is likely to be extremely weak," analysts at RDQ economics said in a research note.