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The U.S. economy remains mired in a recession, prospects for next year are weak and home prices may resume declines, Harvard University economics professor Martin Feldstein said.

“The recession isn’t over,” Feldstein said today in an interview on Bloomberg Radio in New York. “It will be a while before we have enough information to know if the recession ended.”

Feldstein is a former president of the National Bureau of Economic Research and remains a member of the group’s Business Cycle Dating Committee, the panel charged with determining when recessions begin and end. His comments are at odds with those of the panel’s chairman, Robert Hall, who said early this month that the recession may have ended.

Employers in the U.S. cut 11,000 jobs in November, the fewest in 23 months, and the unemployment rate unexpectedly fell to 10 percent from 10.2 percent, a government report showed on Dec. 4.

The report “makes it seem that the trough in employment will be around this month,” Hall said in an interview on the day the figures were released. “The trough in output was probably some time in the summer. The committee will need to balance the midyear date for output against the end-of-year date for employment.”

The economy has lost more than 7.2 million jobs since the recession began in December 2007. The total number of workers collecting unemployment checks as well as those taking extended government benefits totals about 10 million, according to Labor Department statistics released today.

‘Extended Period’

The Federal Reserve yesterday repeated its pledge to keep interest rates “exceptionally low” for “an extended period” and said the “deterioration in the labor market is abating.”

Ben S. Bernanke won backing for a second term as Fed chairman today in a 16-to-7 vote by the Senate Banking Committee. The nomination next goes to a vote of the full Senate.

Gross domestic product expanded at a 2.8 percent annual pace in the third quarter after shrinking for each of the previous four quarters. Growth will average 2.6 percent next year, according to the median forecast in a Bloomberg News survey of economists early this month.

Restrained consumer spending suggests “2010 is going to be a very weak year,” said Feldstein, 70, who was chairman of the White House Council of Economic Advisers during the Reagan administration.

“Thrift in the long run is a very good thing, but increasing thrift as you come out of a recession is going to be a drag,” he said easy to get unsecured personal loans.

Housing Market

Regarding the residential property market, where the recession initially emerged, Feldstein said the Obama administration’s effort to revive the housing market is a failure and home prices will continue to decline.

“It was just not well enough designed,” Feldstein said. “They ended up failing.” That suggests the housing slump will “continue to push down house prices,” he said.

“We saw a little pause in home-price declines in the summer but I think that was because of the first-time home buyers program,” Feldstein said. “We’re not going to get that boost.”

The U.S. House voted Dec. 11 to tighten rules for derivatives and create powers to break apart healthy financial firms that pose a risk to the economy. The House rejected a “cram-down” amendment that would have given federal judges the power to lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court.

Mortgages Modified

Lenders permanently modified 31,382 of the 4 million mortgages targeted for loan relief under the Obama administration’s main foreclosure prevention plan through last month, the Treasury Department announced on Dec. 10.

Economic reports today suggested the government’s efforts to revive growth with fiscal stimulus may be working for now, Feldstein said in a separate interview on Bloomberg Television. “The danger is we will run out of steam,” he said.

The index of leading economic indicators rose for an eighth consecutive month in November, a sign growth will extend into the first half of 2010. The Conference Board’s gauge of the outlook for the next three to six months increased 0.9 percent after climbing 0.3 percent in October.

Manufacturing in the Philadelphia region expanded in December for the fifth month, led by sales and employment gains. The Federal Reserve Bank of Philadelphia’s general economic index climbed to 20.4 this month. Readings greater than zero signal growth. The bank’s district covers parts of Pennsylvania, New Jersey and all of Delaware.

(In the U.S., hear Bloomberg Radio on satellite radio: Sirius Channel 130 and XM Channel 129. In New York City, tune to WBBR 1130 on the AM dial.)

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