It's Official: U.S. In Recession

Well, if you needed an official stamp of disapproval on the U.S. economy, it came Monday: the National Bureau of Economic Research, a private group charged by the government with determining America's economic cycles, said the country has been in a recession since December 2007.

The NBER uses a mix of economic statistics to decide when downturns begin and end, which means its rulings come after the fact. Judging by recent events in the financial markets, the recession call is a good one, but the widely accepted definition of two consecutive quarters of economic contraction will not come before the end of the year, unless earlier numbers are sharply revised.

Third-quarter gross domestic fell 0.3%, following a 2.8% increase in the second quarter.

New data on Monday did not point to happier days being here again. The Institute for Supply Management said its index of national factory activity fell to 36.2 in November from 38.9 in October. The drop brings the index to its weakest point since 1982, when the United States was also in a recession. Adding insult to injury, the reading was still below Wall Street's already dour 37.0 forecast.

The numbers, along with a sell-off from last week's buying-spree, led stocks to tumble on Monday, while the yield on the benchmark 10-year U.S. Treasury note fell to 2.83% from 2.96%.

The ISM also reported new orders also fell to the lowest since 1980, down to 27.9 in November from 32.2 in October. A reading below 50 indicates contraction in the sector.

In another sign that inflationary pressures are ebbing fast, the prices paid subcomponent fell to its lowest level since 1949, dropping to 25.5 in November from 37.0 in October. The prices paid index peaked this year at 91.5 in June.