On December 1, the National Bureau of Economic Research officially declared that the U.S. economy had entered recession in December 2007, a full year earlier. [1] (See late 2000s recession)
The Labor Department said that the US lost 533,000 jobs in November 2008, the biggest monthly loss since 1974. This raised the unemployment rate from 6.5% to 6.7%.
On December 9, the Bank of Canada lowered its key interest rate by 0.75% to 1.5%, the lowest it had been since 1958; at the same time the Bank officially announced that Canada's economy was in recession. [2] This move came after the news that Canada lost 70,600 jobs in the month of November, the most since 1982. [3] The official Bank of Canada press release stated that "[the] outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated." [4]
On December 11, the FBI announced the arrest of Bernard Madoff in a Ponzi scheme which totaled $50 billion by Madoff's own estimate, and which was soon found to affect banks, individuals, and charities in the U.S. and Europe. [5]
After 5 positive days, on December 1 the S&P 500 fell 80.03 points to 816.21, down 8.93%. Financial stocks in the S&P 500 fell 17%. The Dow Jones Industrial Average closed at 8,149.09 with a drop of 679.95 points (7.70%). Oil fell below $50 a barrel in New York Trading. [6] The General Accounting Office released a report that claims that the Oversight of the Troubled Assets Relief Program requires additional actions to ensure "integrity, accountability, and transparency". ( Washington Post ) (bloomberg.com) ( Wall Street Journal ) (CNN Money)
On December 22, US industry leaders asked the Federal Reserve for assistance un-freezing the commercial real estate market, which has not securitized any loans in the last six months of 2008. [7]