According to the formal dating of the business cycle by the National Bureau of Economic Research (NBER), the US economy reached a peak of economic activity in December 2007, which marks the beginning of the US recession. While some economists tend to refer to a technical recession as two consecutive quarters of decline in real GDP, the NBER uses a broader definition of ‘a significant decline in economic activity spread across the economy and lasting more than a few months, normally visible in production, employment, real income, and other indicators'. The committee pays particular attention to payroll employment, which has declined by 1.9 per cent since the peak reached in December 2007, allowing the unemployment rate to reach 7.2 per cent in December 2008, the highest rate since 1992. We expect a sharper decline in US employment this year, and see the unemployment rate reaching 10½ per cent in 2010, the highest level since a brief peak in 1982.