Buffett: Recession Is Here For People on Main Street

The US economy indeed has entered into a recession, even if the traditional indicators aren't showing it yet, billionaire investment guru Warren Buffett said.

Gerald Herbert / AP Warren Buffett

Economists generally pronounce a recession for an economy that has shown two consecutive quarters of negative growth in gross domestic product, but Buffett said on CNBC Monday that you can throw that model out.

"I think it's defined by the man in the street a little differently than whether there's been two quarters of reported (negative) GDP growth," the Berkshire Hathaway Chairman said. "We're in a recession, unless you want to stick strictly to the technical definition, which I think really doesn't have much meaning to the fellow who has lost his job or is facing a money market fund that isn't paying him out or whatever it may be."

He also said the recession could be more painful than some think.

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.

"I think consumers are feeling gas and food prices, and not feeling they've got a lot of money for other things."

At the same time, he praised the Federal Reserve for its role in trying to keep the economy afloat as it faces myriad pressures from the credit crunch and skyrocketing fuel costs.

In particular, he said the central bank acted properly in its rule during the controversial bailout of investment bank Bear Stearns . The Fed helped broker a deal between Bear and JPMorgan Chase that allowed Bear to avoid insolvency.

"I think that what the Fed did ... with Bear Stearns was a big line in the sand," Buffett said. "At that point, the world started looking different in the financial world."

Buffett's Berkshire Hathaway was in the news for its involvement in the Mars purchase of Wm. Wrigley Jr.  Berkshire is taking a minority stake in the new Wrigley subsidiary.

"It's not a common role for us, but it's something we have done before and will probably do again. I think in this particular case we fit very well as a partner for what the Mars family wanted to have done in this purchase," Buffett said. "They needed somebody they felt comfortable with."

© 2009 CNBC.com