Record plunge points to lasting decline

A record plunge in commodities may signal the US is headed for the longest recession since 1981, just after Ronald Reagan became president and the economy began a 16-month slump.

Industrial raw materials measured by the Journal of Commerce fell at an annual rate of as much as 56 percent last week, the most since 1949 and worse than the declines before every recession since then. Crude oil, copper and wheat tumbled more than 50 percent from records this year as the US economy declined in the third quarter by the most since 2001.

"The industrial sector, which was helping to keep the recession relatively mild, has completely given way and now we need to be prepared for a much more severe recession," said Lakshman Achuthan, managing director at the Economic Cycle Research Institute in New York, which compiles the Journal of Commerce data.