US officially in recession, Dow Jones dives 7pc
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US in recession: Wall Street was hammered overnight (AFP: File photo)
Wall Street's Dow Jones index dived more than 7 per cent overnight after the US was officially declared to be in recession.
The National Bureau of Economic Research said the US had been in recession since December 2007.
The private, non-profit group is charged with officially designating whether or not the US is in recession.
It says its group of academic economists made the determination during a conference call last week.
A recession is often deemed to have started when there have been two consecutive quarters of negative economic growth.
But the National Bureau of Economic Research says it uses broader measures, including employment data.
The bureau has not indicated how long the recession will last.
US stocks dived as investors worried about the economy.
The Dow Jones Index slumped 7.7 per cent, or 680 points, to 8,149. The Nasdaq fell by nearly 9 per cent and the Standard and Poor's 500 lost just over 7 per cent.
Sentiment was not helped by comments by Ben Bernanke, the chairman of the US Federal Reserve, that the US economy remains under considerable strain and with official interest rates at 1 per cent, further cuts will not do much to help.
US factory activity fell in November to its weakest level since 1982.
London's stock market suffered its first drop in three days, with the FT-100 shedding 176 points, or 4 per cent.
The Australian dollar has dropped against the greenback. It is trading at about 64.2 US cents.
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