Recession Officially Lasted Just Two Months

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The epidemic recession is officially over.

In fact, it’s been over for over a year.

National Bureau of Economic ResearchThe semi-official arbiter of US business cycles said on Monday that the recession ended just two months later, in April 2020. This makes the record by far the shortest contraction – so short that by June 2020, the bureau officially marked the beginning of a recessionIt had been two months since. (The previous shortest recession recorded in 1980 lasted six months.)

But the 2020 recession was unusually severe, though brief. Employers cut 22 million jobs in March and April, and the unemployment rate hit 14.8 percent, the worst since the Great Depression. Gross domestic product fell more than 10 percent.

The end of the recession does not mean that the economy has recovered. United States of America nearly seven million fewer jobs From pre-pandemic and gross domestic product likely to return to pre-pandemic levels, thousands of businesses have failed and millions are still struggling to get back on their feet.

But for economists, recessions aren’t just periods of financial hardship. They are periods of economic contraction measured by employment, income, production and other indicators. When growth resumes, stagnation ends, no matter how deep a hole remains. For example, the recession that accompanied the 2008 financial crisis ended in June 2009—four months before the unemployment rate peaked and years before many Americans began to experience a meaningful recovery.

The unusual nature of the pandemic-induced economic collapse challenged the traditional concept a “recession” National Bureau of Economic Research defines a recession It is defined as “a significant decline in economic activity that spreads over the economy and lasts for more than a few months”. Taken literally, the latest downturn failed that test – the recession only lasted weeks. But the bureau’s Business Cycle Appointment Committee decided that the contraction should still apply.

“The Committee concluded that the unprecedented magnitude of the decline in employment and output, and its wide reach across the entire economy, warranted the designation of this episode as a recession, even though the recession was shorter than previous contractions,” the committee said. a phrase.

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