COLUMBUS, Ohio — Oil prices tumbled below $50 a barrel today as National Bureau of Economic Research reported that the U.S. economy has been in a recession since December 2007.

Crude had already fallen 8 percent on reports showing that manufacturing activity in the U.S. hit a 26-year low, which was much worse than expected, and construction spending fell again.

A panel of the NBER believes the current downturn will last until the middle of 2009 and will be the most severe slump since the 1981-82 recession.

Light, sweet crude for January delivery more than 7.5 percent, or $4.07 to $50.36 a barrel on the New York Mercantile Exchange after sinking as low as $49.52.

Manufacturing and consumer spending has eroded quickly and lowered demand for energy. That has erased nearly 66 percent of crude's market value since July when it peaked near $150 per barrel.

Analyst Phil Flynn with Alaron Trading Corp. said the $50 price remains significant psychologically for traders.

"It opens up the possibility of further declines," he said.

In a note to investors Monday, Raymond James Equity Research slashed its oil price forecast from $90 per barrel to $60 per barrel.

In London, January Brent crude fell 9 percent, $4.85 to $48.64 on the ICE Futures exchange.

On Saturday, Saudi Oil Minister Ali Naimi said that Organization of Petroleum Exporting Countries will do what needs to be done to shore up falling oil prices when the group meets Dec. 17 in Algeria, but for now it was too early to make another cut.

Prices continued to slide despite a separate report by Iranian state TV in which OPEC Secretary-General Abdullah El-Badri said that a daily oil production cut of between 1 million and 1.5 million barrels was likely in December.

OPEC, which accounts for about 40 percent of global supply, cut output by 1.5 million barrels a day in October, bringing total quota cuts to around 2 million barrels a day this year.

OPEC's actions have had no discernible effects on oil prices, which have fallen another 26 percent since the last round of production cuts.

"The OPEC meeting from their viewpoint was a disaster," Flynn said.

Internal divisions within OPEC are reminiscent of the 1990s when an oil glut forced prices down and OPEC states routinely cheated on production quotas.

In an environment of falling demand, Flynn said oil traders were also selling off as the Dow Jones industrial average gave up 400 points Monday and because of the bad manufacturing figures.

The Institute for Supply Management said its gauge of manufacturing activity fell to a reading of 36.2 in November. That was a steeper-than-expected drop from the October reading of 38.9 and underscored that the hard economic times were beginning to have a major effect manufacturing. A reading below 50 indicates the sector is contracting.

The Commerce Department reported that construction spending dropped by 1.2 percent in October, much bigger than the 0.9 percent decline many analysts expected.

The decline in the stock market follows the first five-day string of gains for both the Dow and the Standard & Poor's 500 since July 2007, and the largest five-day percentage gain in at least 75 years. The Dow has gained 16.9 percent and the S&P 500 index 19.1 percent since a rally that began Nov. 21.

"The explosive rally we saw last week seems like a memory today," Flynn said.

Survey of manufacturing activity in the euro zone and Britain also points to sharper-than-expected contraction in output. In China, an equivalent survey of its manufacturing sector also made for grim reading, generating fears that one of the main engines of global growth over the last few years is slowing sharply.

Sucden Research in London cited data from the United Nations, which now expects the global economy to grow by just 1 percent in 2009, compared with an earlier forecast expecting growth of 2.5 percent.

Meanwhile, Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.

Iranian Oil Minister Gholam Hossein Nozari was quoted as saying Sunday that the market was oversupplied by around 2 million barrels per day and that production should be cut by that amount.

Meanwhile, prices at the pump continued to fall, but at a slower rate. The price fell half a cent overnight to $1.82 per gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. That is 64.3 cents lower than a month ago and $1.248 lower than a year ago.

Prices also have been falling in Europe though they remain much higher than in the U.S.

In Germany, Europe's largest economy, a liter of gasoline sold for $1.47 per euro, or about $5.59 per gallon, according to TCS, the Swiss automobile club. That is down 26 percent from July 16.

Prices have fallen 24 percent since July 16 in France where gas sold for $1.40 per euro Monday.

In other Nymex trading, gasoline futures tumbled 7.9 cents to $1.1305 a gallon. Heating oil dropped 8.1 cents to $1.6454 a gallon. Natural gas for January delivery, however, rose 13.7 cents to $6.647 per 1,000 cubic feet.