[DEBATE] : Recession in the US 'has arrived' - Merrill Lynch
Riaz K Tayob
riazt at iafrica.com
Tue Jan 8 13:42:05 GMT 2008
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
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
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
"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.
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