U.S. Recession Indicator Starts Flashing At Merrill (Roma Luciw)

Created by : Francis Goodwin View profile

ROMA LUCIW -- Globe and Mail

Dec. 19, 2007 -- The U.S. economy is likely headed for a painful and pronounced downturn next year, according to a Merrill Lynch recession probability indicator.

“Clients should be taking recession risks very seriously,” David Rosenberg, Merrill's North American economist, said in a report.

Fears of a U.S. recession have picked up in recent months, but most economists still believe the world's largest economy will manage to avert an official slowdown.

A recession is often characterized as two straight quarterly declines in gross domestic product. The Merrill note uses the U.S. National Bureau of Economic Research's definition, which is of a significant decline in economy activity lasting more than a few months and evident across economic measures including GDP, employment and retail sales.