US recession is already here, warns Merrill

By Cernig

It's getting scant play over on this side of the pond that I've seen - but it's worth noting that Merrill Lynch says the US recession has already started.

David Rosenberg, the bank's chief North American economist, argues that a weakening employment picture and declining retail sales signal the economy has tipped into its first month of recession.

Mr Rosenberg, who is well-respected on Wall Street, argues: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."

His comments are the strongest sign yet that the gloom on Wall Street over the US economy is deepening as the sub-prime mortgage crisis and the credit rout show little sign of easing.

Mr Rosenberg points to a whole batch of negative data to support his analysis, including the four key barometers used by the National Bureau of Economic Research (NEBR) - employment, real personal income, industrial production, and real sales activity in retail and manufacturing.

Sean-Paul at the Agonist notes that Morgan Stanley are leaning towards the same conclusion. Yet this realisation doesn't seem to have broken through into the mainstream yet, especially not in political reporting.

Maybe it's time for the GOP frontrunners to begin explaining how their economic policymaking would differ from Bush's, instead of simply promising to keep his tax cuts?