. November 17, 2008 SouthAmerica: Here is some wishful thinking for you - âU.S. in 14 month recessionâ ******* Forecasters: âU.S. in 14 month recessionâ By Burton Frierson Reuters â November 17, 2008 NEW YORK (Reuters) â The U.S. economy fell into recession last spring and will contract sharply this quarter as more than 200,000 workers per month are added to the rolls of the unemployed, a survey said on Monday. The Philadelphia Federal Reserve's latest Survey of Professional Forecasters removed some of the glow from an earlier report showing industrial output rebounded in October after hurricane disruptions produced a stunning fall in September. Early data from the factory sector also supported the grim view of the forecasters, showing manufacturing in New York state tumbled in November to yet another record low. Japan on Monday joined the euro zone in recession. Although the U.S. economy contracted in third quarter, that followed two consecutive quarters of growth, albeit helped by government stimulus payments. The arbiter of U.S. business cycles has not yet declared the economy in recession, generally defined as two consecutive quarters of contraction. The latest data and surveys provided new evidence that turmoil in credit markets was tightening its grip over the economy, which is unlikely to seen any relief soon from the worst financial crisis since the Great Depression. "The early signs suggest that the November data cycle is likely to be extremely weak," analysts at RDQ economics said in a research note. On Wall Street, weak stocks hit session lows in the wake of the survey of forecasters and news that Citigroup said it would cut 50,000 jobs, or 15 percent of its workforce. Government bonds, which benefit from signs of economic weakness, were higher on the day. The dollar slid against the yen. The Philadelphia Fed's survey said the U.S. economy entered a recession in April and that it will last 14 months. It predicted gross domestic product would shrink by 2.9 percent in the fourth quarter, a sharp downgrade from the previous prediction of 0.7 percent growth. The survey predicted the economy would shed an average of 222,400 jobs per month this quarter, versus the previous forecast of a loss of 45,400 per month. The survey said first-quarter GDP would decline by 1.1 pct and the unemployment rate would hit 7.0 percent during the first three months of next year. A separate report by the Federal Reserve showed U.S. industrial production rose a stronger-than-expected 1.3 percent in October after a downwardly revised September drop of 3.7 percent -- the biggest fall in more than 62 years. Economists polled by Reuters had expected industrial output to rise just 0.2 percent in October, following an initially reported 2.8 percent fall in September. The September slide in industrial output was the steepest since a 5.0 percent decline in February 1946. The Fed said the revision to September output resulted, in part, from a larger estimate of the impacts that Hurricanes Gustav and Ike had on the chemical industry. "EMPIRE" STRICKEN In a separate report, the New York Fed said its "Empire State" general business conditions index fell to minus 25.43 from minus 24.62 in October. That was the lowest reading on manufacturing in New York state since the inception of the index in July 2001. The report "paints a dim picture," said David Ader, head of government bond strategy at RBS Greenwich Capital, in Greenwich, Connecticut. "Still, this is not exactly surprising but more confirmation," he added. Economists polled by Reuters had expected an even weaker reading of minus 26.10. The report, based on a survey of manufacturers in New York state, was generally bleak. The indexes for new orders and shipments slid to record lows, while the measures for unfilled orders, employment and inventories all slipped to their lowest levels since late 2001. As with many recent reports, the one silver lining was that inflation measures fell, which should give the Federal Reserve leeway to continue holding interest rates low as it fights the effects of the worst financial crisis in 80 years. The prices paid index fell for the fourth straight month and the prices received index tumbled to its lowest level in more than three years, the report said. Respondents were also asked about cash holdings and debt financing. Just 20 percent of respondents reported that their cash balances were higher than usual, while 30 percent reported unusually low balances -- about the same proportions as in an identical poll conducted last year as part of the November 2007 survey, the report said. In November, 38 percent of respondents reported tightening credit standards, up from 25 percent in October's survey. Among those reporting tightening credit, the most widely cited effect was reduced capital investment, followed by workforce cuts, a shorter workweek and delays in payments to vendors, the report said.