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Economy Darkened Heading Into Holidays

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By JEANNINE AVERSA The Associated Press

The Tampa Tribune

Published: December 4, 2008

WASHINGTON - The country's economic picture darkened further as Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.

The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested that the economy is sinking deeper into recession.

"Economic activity weakened across all Federal Reserve districts," concluded the report, which was based on information collected before Nov. 24.

The Fed didn't use the word "recession," but just two days earlier, the National Bureau of Economic Research declared that the country had been suffering through one since last December.

To cushion the fallout, Federal Reserve Chairman Ben Bernanke said Monday that the central bank is prepared to lower its key interest rate and to explore other ways to revive economic activity. Many economists predict the Fed will cut its rate - now near a historic low of 1 percent - at its last scheduled meeting this year, on Dec. 16.

With jobs vanishing, shoppers cut back, causing retail sales to be "weak" or "down" in most of the Fed's 12 regions.

Many analysts think the economy will continue to shrink through the rest of this year and into the first quarter of next year. At 12 months and counting, the current recession is longer than the 10-month average length of recessions since World War II. The record for the longest recession in the postwar period is 16 months, which was reached in the 1973-75 and 1981-82 downturns.

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