Economists, politicians and business executives have been vigorously debating about when the U.S. economy will slide into recession. But Dan North, chief economist of Euler Hermes ACI, says the argument is moot. "I believe that the economy will not go into a recession; I believe that the economy is almost certainly in a recession already," he said in a late February report. High oil prices, the delayed impact of monetary policy tightening and the burst housing-market bubble have all been conspiring to slow the economy for some time, North said. Fourth-quarter 2007 gross domestic product grew at the "anemic" rate of 0.6 percent, as housing prices continued to plummet, consumer holiday spending tanked, foreclosures surged, and unemployment in the housing and finance sectors rose. The jobs report for January 2008 showed "negative growth"-that's a decline in common English-which is a "virtually certain" sign of recession, according to North. Government action, in the form of a $168bn stimulus package and a big cut in the federal funds rate at the beginning of the new year, confirmed expectations of the slump. What's more, the January minutes of the Federal Reserve Board twice used the word "downturn," a euphemism for recession. But all is not gloom and doom, in North's opinion. He sees the possibility of some economic recovery as early as the fourth quarter of this year. That's when the impact of the Fed's interest rate cutting will fully kick in. Meanwhile, the housing market should finally be starting to emerge from its slump. The U.S. is currently on the downside of a regular business cycle, North said, "but the upside ... is coming too. We just have to wait a few quarters for it."

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