December 2, 2008

Current recession could break records

The current economic downturn could break the duration record for a U.S. recessions dating back to World War II, economists said.

The National Bureau of Economic Research, official historians for the U.S. economy, said Monday that the recession began December 2007, putting the current morass ahead of the 10.5-month average for a post-World War II recession, The New York Times reported Tuesday.

The longest recessions on record, downturns of 1973-74 and 1980-81, lasted 16 months, the Times said.

Data suggest the current downturn is far from over. Manufacturing activity fell to its lowest level in 26 years in November, consumer spending has been declining and Shela Bair, chairwoman of the Federal Deposit Insurance Corporation, warned last month that 4.5 million people could lose homes to foreclosure.

Right now, we still seem to be in an accelerating downslope of this economic cycle, Ethan Harris, head of U.S. economic research at Barclays Capital told The Washington Post.

We will rewrite the record book on length for this recession, said Allen Sinai, president of Decision Economics in Lexington, Mass. It's still arguable whether it will set a new record on depth. I hope not, but we don't know.