US Recession: Duration Fears Deepen

17 April 2008

WASHINGTON DC: In the wake of politicians' grudging admission that the US is in recession, economists have raised their heads above the parapet to predict that the downturn is likely to last longer than previously whispered.

The National Bureau of Economic Research, which officially determines the duration of recessions, says the last two in 2001 and 1990-1991 each lasted eight months.

But analysts believe the present squeeze could be longer and considerably more painful.

Opines University of Maryland economics professor Peter Morici: "We have a deadly combination of commodity price inflation and credit contraction.

"It's tough to imagine a worse combination. In a worst case scenario, the recession could last several years."

The Federal Reserve, nonetheless, has sounded a more optimistic note.

It predicts modest growth in the year's second half, based on the belief that the economic stimulus package passed by Congress in February, plus a series of interest rate cuts, will jump-start higher spending by consumers and businesses.

Data sourced from; additional content by WARC staff