[DEBATE] : Recession in the US 'has arrived' - Merrill Lynch

[Riaz K Tayob]

Recession in the US 'has arrived'

Merrill said Friday's employment figures confirmed the recession

The feared recession in the US economy has already arrived, according to 
a report from Merrill Lynch.

It said that Friday's employment report, which sent shares tumbling 
worldwide, confirmed that the US is in the first month of a recession.

Its view is controversial, with banks such as Lehman Brothers disagreeing.

An official ruling on whether the US in recession is made by the 
National Bureau of Economic Research, but this decision may not come for 
two years.

The NBER defines a recession as "a significant decline in economic 
activity spread across the economy, lasting more than a few months".

It bases its assessment on final figures on employment, personal income, 
industrial production and sales activity in the manufacturing and retail 
sectors.

Merrill Lynch said that the figures showing the jobless rate hitting 5% 
in December were the final piece in that puzzle.

"According to our analysis, this isn't even a forecast any more but is a 
present day reality," the report said.

It added that the current consensus view on Wall Street that there is a 
good chance of avoiding a recession is "in denial".

It also objected to the use of euphemistic terms for the state of the 
economy.

"To say that the backdrop is 'recession like' is akin to an obstetrician 
telling a woman that she is 'sort of pregnant'," the report said.

http://news.bbc.co.uk/2/hi/business/7176255.stm