"We now think the economy can be described as having entered a recession in early 2008," said Bruce Kasman, chief economist at JP Morgan Chase & Co. in New York.

The darkening economic outlook, coming just nine months before the presidential election, puts enormous pressure on President George W. Bush.

In a hastily arranged appearance before television cameras Friday, Bush acknowledged that the US economy had slowed, but he insisted that his government will take action to boost the economy.

"Losing a job is painful and I know Americans are concerned about our economy. So am I," he said.

"It's clear our economy has slowed, but the good news is, we anticipated this and took decisive action to bolster the economy," he added.

Earlier, Edward Lazear, chairman of the White House Council of Economic Advisers, said the economy could contract in the current quarter.

"I'm still not saying that there's a recession," Lazear emphasized, "We are going to have a weak growth quarter, and whether you call that a recession or not is something that we won't know for many months."

To fend off a possible recession, Bush has signed a 168-billion-dollar economic rescue package that will soon deliver advance tax refunds of several hundred dollars to most taxpayers.

According to the stimulus package, individuals who pay income tax will get up to 600 dollars, working couples 1,200 dollars and those with children an additional 300 dollars per child.

Workers who make at least 3,000 dollars but do not pay taxes will get 300 dollar rebates.