Economists May Declare Recession

The U.S. economy may be officially declared in recession this week just as American consumers are showing increased confidence that the worst of the slowdown may have passed.

Today, the arbiters of the ups and downs of the U.S. economy probably will report that a recession has begun, possibly as long ago as March.

The six economists who form the committee of the National Bureau of Economic Research, which dates U.S. business cycles, spoke by telephone Friday about whether statistics on employment, industrial production, wholesale and retail trade and personal incomes point to the first recession since 1990-91.

The Cambridge, Mass.-based group will announce the committee’s decision today on its Web site, said Jeffrey Frankel, a professor at the Kennedy School of Government at Harvard University and a member of the panel. Frankel declined to reveal how his colleagues had voted, though he said he believes a recession is underway.

If so, it may be short-lived. The Conference Board’s consumer confidence index probably rose to 86.5 in November from 85.5 in October, based on the median of 36 forecasts in a Bloomberg News survey. The October reading was the lowest since February 1994, and an increase for November would be the first since June. The New York-based Conference Board is scheduled to release the report Tuesday.

Rising retail sales may contribute to a more positive assessment of the economy when the Federal Reserve issues its so-called beige book Wednesday, analysts said. The report, which consists of anecdotes gathered by the Fed’s 12 district banks, covers the last half of October through the first half of November.

The report will be used by central bankers at their next meeting Dec. 11 to determine whether an 11th reduction in interest rates this year is necessary.

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Other economic reports this week:

* Tuesday, the National Assn. of Realtors will report on sales of existing homes during October.

* Thursday, the Commerce Department will report on orders for durable goods in October.

Also on Thursday, the Commerce Department will report on October new-home sales.

* Friday, the Commerce Department will issue revised figures for third-quarter economic growth. Preliminary figures showed that gross domestic product shrank at a 0.4% annualized rate between July and September.

Also on Friday, Fed Chairman Alan Greenspan speaks to the Euro 50 Group and is expected to participate in a round-table discussion following his speech.