US economy still in recession

The US economy is still in a recession that began in March 2001, a panel charged with dating US recessions said in its January report.

"According to the most recent data, the US economy continues to experience growth in output but declines in employment," the National Bureau of Economic Research (NBER) panel noted recently.

The US economy commenced in recession in March 2001, marking the end of an 8 - 109 year growth cycle, said the NBER's six-member business cycle dating committee.

Many macro economists define a recession as two or more consecutive quarters of shrinking gross domestic product [GDP] which can be measured in numerous ways. Accordingly, the US economy dived into a recession the first half of 2001 but may have begun to emerge in the fourth quarter of 2002.

There is a broader measure. A recession is a significant decline in activity spread across the economy that lasts more than a few months. It dates a recession as being the time between a peak in economic activity and a trough.

"The trough date will mark the end of the recession," the NBER report said. But it added that it usually waits many months to judge when the economy has hit a trough because of possible revisions to the numbers and the risk that a contraction might resume.

Employment numbers are key to determining business cycles. US firms unexpectedly cut 101,000 jobs in December, when the unemployment rate stood at 6%. The Federal Reserve's latest Beige Book survey last night said the economy remained subdued with weak consumer spending, a marginal increase in manufacturing and flat jobs growth.