Recession Hits US Could Be Worst In Half Century

The president of America's National Bureau of Economic Research says the United States has entered a recession that's going to get a lot worse and could be the worst to hit the country since WWII.

"The situation is bad, it's getting worse, and the risks are that the situation could be very bad," Martin Feldstein said in a speech yesterday at a financial industry conference in Boca Raton, Fla. From The Boston Globe:

"Feldstein's remarks were punctuated by an extraordinary run of alarming developments yesterday, including surging oil prices, new worries about home foreclosures, and the near collapse of a venerable investment bank that sparked another rout in stock prices on Wall Street.

Rising oil prices, in turn, are driving up prices for everything from food to electricity, threatening to end years of modest inflation. Gold prices hit a fresh record yesterday, as investors embrace it as a hedge against inflation and a weakening US dollar, which remained at lows against the euro.

Feldstein followed his remarks in Florida with an emphatic statement later in the day.

"The economy is now in a recession," he said. "It will last longer and be deeper than the last two recessions, which lasted only 8 months from peak to trough. It could well be longer and deeper than the recession in the early 1980s that lasted 16 months."

Feldstein's view is increasingly the common one among economists. A Wall Street Journal survey of economists published yesterday found more than 70 percent agreed that the US economy is now in recession."