US manufacturing output dropped to its lowest level since the 1981-82 recession in November, according to figures released today.
The news comes as the much-respected National Bureau of Economic Research said America entered into a recession a year ago, citing the continuing decline in unemployment since December 2007 as a key factor in its definition.
Now there is even more pressure on the Federal Reserve to cut its benchmark lending rate by a further point five percent at its meeting later this month: “Today we continue to work through a severe financial crisis. While we are making progress, the journey ahead will continue to be a difficult one. But I have confidence that we are pursuing the right strategy to stabilize the financial system and support the flow of credit into our economy “ said US Treasury Secretary Henry Paulson.
The news also had a knock-on effect on the world’s markets. Wall Street’s Dow Jones and Nasdaq closed down more than seven and nine percent respectively.
All of Europe’s major exchanges closed down on or around five percent.