Merrill Lynch declares we have entered in recession.

David Rosenberg, chief North American economist for Merrill Lynch, announced: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."

Marketwatch reports:

"Friday's employment report strongly suggests that an official recession has arrived," Rosenberg wrote in a note to clients on Monday.

"The key question now is how deep the recession will be and how long it will last," wrote Richard Berner and David Greenlaw, economists for Morgan Stanley, in a note to clients on Monday.

According to the Telegraph:

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.

Mr Rosenberg notes that although the NEBR will be the final arbiter of any recession, such confirmation may be two years away as it typically waits for conclusive evidence including benchmark revisions.

However, he believes that all four of these barometers "seem to have peaked around the November-December period, strongly suggesting that we are actually into the first month of a recession."

The Big Picture posted this graph:



Here are some Rosenberg quotes from the Jay Hancock's blog at the Baltimore Sun:

At no time in the past sixty years has the unemployment rate risen 60 basis points (50 bps is the actual cutoff) from the cycle low without the economy slipping into recession, and here we now have the jobless rate hitting 5% in December versus the March/07 trough of 4.4%.

Aggregate hours worked in the economy contracted at a 0.4% annual rate in 4Q, and this comes on the heels of a 0.6% decline in 3Q. Back-to-back declines in total hours worked have always been associated with recession.

The level of unemployment is up 13% YoY, again a development that has always been consistent with past recessions. The YoY rate of change in the level of the unemployed who have been idle for at least 15 weeks is particularly ominous - +20%, which is a pace that prevailed in the early stages of prior economic downturns (hitting this trend in April/01 and in Aug/90 when the recessions were one-month old).

And we have Household Employment contracting 49,000 in 4Q and the YoY trend lowing to +0.2% in December from +2.2% a year ago, another classic recession signal. Consider for a second that in March of 2001 that trend was running at +0.8%, and in July of 1990 the pace was +1.1% - those two months represented the onset of a technical recession and yet the trend in Household jobs is weaker now than it was then.

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