NEW YORK (Bloomberg) — The employment report last week proved that the US 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 towards the end of last year," New York-based Rosenberg, North American economist at the world's biggest brokerage, wrote.

Hiring in the US slowed more than forecast in December and unemployment jumped to a two-year high, the Labour Department said last week. Payrolls rose by 18,000, capping the worst year for job creation since 2003, and the jobless rate increased to five percent from 4.7 percent in November.

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