- The Washington Times - Saturday, November 8, 2008

The head of the panel that officially dates U.S. economic cycles said there’s no doubt now that a recession is under way following a surge in the unemployment rate to a 14-year high.

“The evidence is more than compelling,” said Robert Hall, the Stanford University economist who leads the National Bureau of Economic Research’s business cycle dating committee. “It’s conclusive, in my personal opinion.”

With Friday’s remarks, Mr. Hall joined fellow panelist and Harvard University professor Martin Feldstein in calling a recession. The eight-member panel will meet at a later date to make an official determination, because it needs additional details on gross domestic product figures, Mr. Hall said.

Mr. Feldstein and other analysts have said the economic slump is likely to be deeper than the past two recessions, in 2001 and 1990-91. Friday’s employment report reinforced that pessimism, with the unemployment rate climbing to 6.5 percent in October from 6.1 percent the previous month.

• Click here: Joblessness balloons to 6.5 percent

The U.S. has lost more than half a million jobs in two months, the Labor Department reported Friday in Washington. Goldman Sachs Group Inc. economists said the jobless rate is likely to climb to 8.5 percent by the end of next year, a level unseen since 1983.

The U.S. economy shrank at a 0.3 percent annual rate last quarter, the most since the 2001 downturn, advance Commerce Department figures showed last week. The department will publish a revised estimate on Nov. 25, with a third take coming in December. The fourth-quarter GDP release is scheduled for late January.

“The reason that the committee will wait is our concern with the real GDP part of the story, which is not yet completely in focus,” Mr. Hall said. “Because the committee states a definite month for the peak” in the economy “and because it considers output as well as employment, it needs to wait for more data on output.”

Mr. Hall added that “the committee is fully aware of the obvious signs of decline in economic activity.”

The NBER is based in Cambridge, Mass., and Federal Reserve Chairman Ben S. Bernanke is a former member of the business-cycle panel.

While GDP shrank in the third quarter, declines in payrolls suggest the recession began as early as December 2007 or January of this year, Mr. Feldstein has repeatedly said. Mr. Feldstein retired in June as president of the NBER.

“We are right in the teeth of the recession,” said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C. “The question now is how long and how deep of a recession.”

The NBER panel defines a recession as a “significant” decrease in activity over a sustained period of time. The decline would be visible in GDP, payrolls, production, sales and incomes, according to the group.



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