The employment report last week proved that the U.S. economy entered its first recession since 2001, according to Merrill Lynch & Co.'s David Rosenberg.

"Friday's employment report confirmed our suspicions that the economy was transitioning into an official recession toward the end of last year," New York-based Mr. Rosenberg, North American economist at the world's biggest brokerage, wrote in a note dated yesterday.

Hiring in the United States slowed more than forecast in December, and unemployment jumped to a two-year high, the Labor Department said Jan. 4. Payrolls rose by 18,000, capping the worst year for job creation since 2003, and the jobless rate increased to 5 percent from 4.7 percent in November.

The world's largest economy grew at a 1 percent pace in the fourth quarter after expanding at a 4.9 percent rate the previous three months that was the strongest since 2003, according to the median estimate of economists surveyed last month. Growth for all 2008 was projected at 2.3 percent.

Mr. Rosenberg's prediction came a day after an economist with Bear Stearns & Co. predicted that the nation would manage to "skirt" a recession.

David Malpass, Bear Stearns chief economist, said Monday that Federal Reserve interest-rate cuts and an expanding global economy would help the economy avoid a recession.

He predicted that unemployment would rise to 5.1 percent in the second quarter from 5 percent in December, which he said still was low by historical standards.

"We're on track for the logical things that happen when you have a midcycle slowdown, which is what we are in," Mr. Malpass said. "It would be surprising to get a recession out of a 5 percent unemployment rate."