Stocks Fall Sharply on Consumer Spending Worries

Economy in Recession

Then came official word that the economy is now in its 13th month of recession. The National Bureau of Economic Research, the official arbiters of the beginning and ending of U.S. recession, announced that the downturn started in December of last year.

"Because a recession is a broad contraction of the economy, not confined to one sector, the committee emphasizes economy-wide measures of economic activity," said the release statement. "The committee believes that domestic production and employment are the primary conceptual measures of economic activity."

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White House deputy press secretary Tony Fratto reacted to the news saying, "The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus."

Confirmation of the recession pushed oil prices back below $50 to close at $49.28 a barrel, down $5.15, more than 9 percent. As oil prices continue their steep decline, gasoline prices also continue to fall. The Energy Information Administration reported Monday afternoon that the average price of a gallon of gasoline dropped to $1.81, off 8 cents from last week. Gasoline is now 56 percent lower than its peak only five months ago.

In the midst of the economic news, the two administration officials leading the charge to shore up the nation's economy spoke.

Speaking to the Greater Austin Chamber of Commerce, Federal Reserve Chairman Ben Bernanke said, "Despite the efforts of the Federal Reserve and other policymakers, the U.S. economy remains under considerable stress."

Bernanke used the speech to review the three major areas where the nation's central bank has taken action: lowering interest rates, providing banks and other institutions greater access to funds held by the Federal Reserve and taking steps to shore up financial institutions teetering on the edge of collapse.