An economic research group on Monday erased any doubt the U.S. economy was spinning out of control, saying the U.S. recession began a year ago.
The National Bureau of Economic Research said significant declines in production, employment, real income and other indicators began after U.S. economic activity peaked in December 2007.
A general rule of thumb for defining a recession is two consecutive negative quarters of gross domestic product growth. The GDP turned negative by 0.5 percent in the July-September quarter this year, and many economists expect GDP will fall at an even sharper rate in the fourth quarter.
“The economy is a two-wheel recession,” said Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business. “The banking meltdown and failure of the Treasury bailout to free up credit are choking the housing market and construction industry, and falling retail sales, month after month, is leaving businesses with unsold goods and forcing layoffs in manufacturing and services alike.”
Looking at regional economic indicators, area home prices and the number of sales continued to slide in October.
The median sale price in Baltimore City and its five surrounding counties fell 4.57 percent in October, according to data gathered by Realtor-owned Metropolitan Regional Information Systems Inc.
The report marked the 12th straight month of decline in price, following a 5.38 percent slip last month.
The number of units sold in the metro area also fell to 1,631 from 1,918 a year ago, a 14.96 percent decline.
Maryland’s sales tax revenues also took a huge hit in October, declining 7.5 percent for the month, according to Comptroller Peter Franchot’s monthly state revenues memo.
Sales tax revenues are down 2.5 percent for the year.
“Not only is October’s performance the worst on record except for February 1991, it reflects sales made prior to the financial market meltdown in early October and the record low of consumer confidence reached in October,” Franchot said in the memo. “It is exceedingly likely that the worst is yet to come.”
The state’s jobless rate increased to 4.9 percent in October from 4.4 percent in September.
The rate is up 1.4 percent since December 2007, according to the Department of Labor, Licensing and Regulation. The U.S. economy as a whole has shed 1.2 million jobs since December 2007.
The NBER decision means U.S. economic expansion most recently lasted for 73 months, from November 2001 until December 2007.
