Stock Market Sinks

http://www.mcclatchydc.com/251/story/56826.html

What took economists so long to say the word 'recession?'

By Dale Kasler
dkasler@sacbee.com
Published: Tuesday, Dec. 02, 2008 | Page 1A

No kidding.

What's been obvious for months became official Monday: The recession is here.

It's already a year old nationally, in fact – and probably even older in California. What's uncertain is how long it will last and how bad it will get.

"Most people have given up on the idea that it'll be mild," said Howard Roth, chief economist at the California Department of Finance.

The official declaration came from the National Bureau of Economic Research, a private organization in charge of locating the turning points in the business cycle. The national recession started last December, it said.

The announcement, plus mixed results from the post-Thanksgiving holiday shopping and a big decline in the Institute for Supply Management's manufacturing index, sank the stock market. The Dow Jones average plunged 679.95 points, recording the fourth-worst point drop ever and erasing half of last week's gains.

[It has since

Roth and economist Jeff Michael, of the University of the Pacific, said it's likely that California entered the recession sometime sooner than the rest of the country. It's possible that places like Sacramento, where the housing market seems to be stabilizing, could come out of it earlier, as well.