U.S. Slump May Be Longest in Three Decades as Economy `Fell Off a Cliff'

[Purveyor]

By Bob Willis and Kristy Scheuble

Nov. 12 (Bloomberg) -- The U.S. downturn will be the longest in three decades, and the drought in consumer spending may be the worst ever, according to economists surveyed by Bloomberg News.

The implosion of credit markets last month will cause the economy to shrink at a 3 percent annual rate in the fourth quarter and decline at a 1.5 percent pace in the first three months of 2009, according to the median estimate of 59 economists surveyed Nov. 3 to Nov. 11. Following last quarter's 0.3 percent drop, the slump would be the longest since 1974-75.

``The economy fell off a cliff in October,'' said Richard Berner, co-head of global economics at Morgan Stanley in New York. ``We had a huge financial shock that intensified the credit crunch and triggered a sharp downturn.''

Declines in household spending will extend into next year as the worst financial crisis in seven decades forces employers to keep cutting payrolls on top of the 1.2 million jobs already lost this year. President-elect Barack Obama has said the U.S. needs a second economic stimulus package ``sooner rather than later.''

The pace of contraction this quarter would be the worst since 1990. Berner is among economists projecting the current slump will also be the most serious in a quarter century as the lack of credit causes a reinforcing, vicious circle of declines in confidence, spending and hiring.

MORE...

BLOOMBERG: http://www.bloomberg.com/apps/news?pid=20601109&sid=aCIytV1_Ii7M&refer=exclusive

[Warpy]

1. Another member of that family in office, another deep recession

the brunt of which is borne by the 99% of the people in this country who are not unimaginably rich.

Jebbie will be running in 2012. Will we have learned our lesson?

[opihimoimoi]

2. Try 5 to 10 years for recovery...maybe more before DOW reaches 14000 once more

Bush and his GOP has really fucked America

Thats what we get for believing BS CRAP from the GOP...Atwater, Rove, hannity, etc should be in the HALL OF SHAME