IT'S official: The United States economy is in recession - and has been since December 2007.

The National Bureau of Economic Research, a private, nonprofit research organization, made the declaration on Monday.

By one benchmark, a recession occurs whenever the gross domestic product, the total output of goods and services, declines for two consecutive quarters. GDP turned negative in the July-September quarter of this year, and many economists believe it is falling in the current quarter at an even sharper rate.

But the NBER's dating committee uses broader and more precise measures, including employment data.

Many economists believe the current downturn will be the most severe since the 1981-82 recession. The US is being battered by the most severe financial crisis since the 1930s as banks struggle to deal with billions of dollars in loan losses.

The Bush administration won approval from Congress on October 3 for a US$700-billion rescue package for the financial system. President George W. Bush told ABC's "World News" this week that he would support additional intervention if necessary.

"I'm sorry it's happening, of course," Bush said, referring to a global financial crisis that has eliminated millions of jobs and damaged retirement accounts.

Federal Reserve Chairman Ben Bernanke said on Monday that further interest rate cuts were possible, but he cautioned there were limits on how such action would be able to revive an economy that is expected to remain weak well into next year.

"Although further reductions are certainly feasible, at this point the scope for using conventional interest rate policies to support the economy is obviously limited," Bernanke said in a speech to business executives in Austin, Texas.

The Fed is widely expected to cut a key interest rate when officials meet early next week.

Treasury Secretary Henry Paulson said the Bush administration is looking for more ways to tap a US$700 billion financial rescue program and will consult with Congress and the incoming administration of President-elect Barack Obama.

(Shanghai?Daily?December 3, 2008)