- GM's Agreement to Sell Saab Unit Falls Apart
- Consumer Confidence Improves but Still Shaky
- US Home Prices Up 5th Month, 2nd Straight Quarter
- FDIC Fund Falls into The Red, Bair Urges Lending
- Ron Paul's Plan to Audit Fed a 'Serious Attack': Mishkin
- Strong Banks, Weak Credit: Treasury Rethinks TARP
- Price War Brews Between Amazon and Wal-Mart
- Buyers Look For Bargains At Luxury Condo Auction
- Blog: Behind The Scenes With Warren Buffett
- Silicon Valley and Hollywood Now Fast Friends
- Markets Can Rise 5-10% in the Near-Term: Strategist
- Busch: The Debt-Interest Rate Paradox
- The Lloyd's Prayer, Leggo My Eggo, Plate Hate & Your Emails
- Buy These 'Competitively Positioned' Stocks: Portfolio Manager
- Behind The Scenes With Warren Buffett
- 'Why the American Consumer Will Keep on Buying No Matter What'
- On Assignment: Europe & Asia
- The L.A. Extravaganza: A Test for Auto Shows
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- US Home Prices Up 5th Month, 2nd Straight Quarter
- GM's Agreement to Sell Saab To Swedish Firm Falls Apart
- Buyers Look For Bargains At Luxury Condo Auction
- FDIC Fund Falls into The Red, Bair Urges Lending
- Revised GDP Reading Puts Growth at 2.8%; Inflation Tame
- Weak Dollar Is Golden for Mining Companies
- Behind The Scenes With Warren Buffett
- CA "More Profitable" After Saving Energy: CEO
Text Size 
Martin Feldstein, who heads the group that is considered the arbiter of U.S. recessions, told CNBC that he believes the U.S. has been sliding into a recession since December or January.
 |
NBER Martin Feldstein |
“I think the professional forecasters have been a little slow to come to the recognition that we’re in a recession,” Feldstein said in a live interview.
Feldstein, president of the National Bureau of Economic Research, said the downturn could go on longer and deeper than the two most recent recessions.
He also said the U.S. gross domestic product would be a misleading, positive number.
“But within this quarter, we’re seeing the monthly numbers coming down,” he said. “As I said, employment, sales, production, all of that are trending down at this point.”
Feldstein said he expects a bounce in the second half of the year as rebates roll out. But, he cautioned not to count on consumer confidence.
“And indeed it runs the risk that those checks will go to paying down credit card debts and other kinds of debts, building up liquidity as people prepare themselves for possible hard times ahead.”
Although the Fed is injecting liquidity into the markets, Feldstein said, they are not dealing with the fundamental issue: the excess of negative equity mortgages.
“They’re providing a little bit of liquidity, but they’re not dealing with the fundamental problem of this wave of potential defaults on mortgages which we’re yet to see, but which I think will become a reality as house prices continue to come down.”
Feldstein noted that further interest rate cuts would not have a significant impact at this point.
“Lower interest rates work by—they will help, but the usual way which lower interest rates push the economy is by expanding housing,” he said. “Well, with the housing market in it’s current situation with the vast overhang of unsold houses, another 50 basis points on the Fed Funds rate isn’t going to do much.”
The National Bureau of Economic Research, a non-profit research organization, typically declares start and end dates for U.S recessions. This group has not officially declared the economy is currently in a recession.
Print
Email
- Remember when auto shows were major events where new models could generate buzz?
- A diet high in fat and sugar might actually be good for your portfolio.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- One shopper explains why he gets up at 3am on the day after Thanksgiving to go shopping every year.
- From the AIG&T to the Merrill Lychee, Jane Wells lists this year's holiday cocktails.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
Data is a real-time snapshot *Data is delayed at least 15 minutes