‘Great Recession’ may just be starting

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Job loss pain crosses boundaries, sectorsAll that Goldman Sachs outsiders don’t get

: said in an interview. "The collection of shocks is a very rare coincidence.

It is not terribly surprising you might get a longer-than-average downturn." The loss of 1.2 million jobs so far this year was the biggest factor in determining the starting point of the US recession, the NBER said. By that measure, the contraction probably deepened last month.

Payroll employment probably fell by 325,000 in November, the most since the last recession, according to the median forecast of economists surveyed by Bloomberg News ahead of a Labor Department report due Dec. 5. The jobless rate is projected to increase to 6.8%, the highest level since 1993. US employers cut 240,000 jobs in October, a 10th consecutive decline. The unemployment rate rose to 6.5 %, the highest level in 14 years, according to Labour Department statistics. "It is clearly not going to end in a few months," Jeffrey Frankel, a member of the NBER committee and a professor at Harvard University, said in an interview.

"We would be lucky to get done with it in the middle of next year." The contraction is the second under President George W Bush's watch, making him the first US leader since Richard Nixon to preside over two recessions.

Lawrence Summers, President-elect Barack Obama's pick for White House economic adviser, said the economy is getting worse and requires more legislative action. "Recent economic evidence suggests that the pace of this downturn is accelerating," Summers said in a statement.

He said Obama wants to enact a recovery package "soon after taking office." Although a recession is conventionally defined as two quarters of successive contraction in gross domestic product, the private committee doesn't require supporting GDP data to make a recession call. Its members focus on month-to-month changes in the economy.

The NBER committee defines a recession as a "significant" decrease in activity over a sustained period of time. The decline would be visible in gross domestic product, payrolls, industrial production, sales and incomes.

The US economy shrank at a 0.5% pace in the third quarter after expanding 2.8% in the previous three months. Economists at Goldman Sachs Group Inc. and Morgan Stanley in New York are among those projecting the economy will contract at a 5 % pace this quarter.