Connect with us


U.S. COVID-19-related recession was the shortest on record



The U.S. recession touched off by the coronavirus lasted only two months, ending with a low point reached in April 2020 after the start of a sharp drop in economic activity in March of that year.

The announcement was made on Monday, by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER).

Of course, none of this means the economy had fully healed and returned to its normal operating capacity by May 2020, NBER further clarified. Rather, economic activity had begun expanding again by that point, and the committee decided that any future downturns would not be a continuation of the brief recession that took place last year.

The committee, a group of macroeconomists who assign the start and end dates of U.S. business cycles, said that indicators of both jobs and production “point clearly to April 2020 as the month of the trough,” with a rebound beginning in May.

Around 22 million jobs disappeared from company payrolls in March and April last year, an event that sparked concern about a new Depression and led Congress and the White House to approve the first of several massive relief packages to keep firms and households afloat.

The announcement makes the pandemic recession by far the shortest on record, at two months only a third as long as the six-month downturn at the start of 1980, and a fourth as long as the recession that followed the tech bubble’s collapse in 2001.

It also highlights the still open debate over how fast the U.S. economy will get back to normal, and what that will mean. Measured by output, the country may already have recovered; measured by employment, it is still far short, with the biggest economic scars threatening lower wage and less-educated workers.

Amid what became a divisive national conversation over masks and lockdowns, some 2.8 million people were brought back to work in May of 2020, and over the next year, about 15 million jobs were recovered. More than 7 million jobs remain lost.

With coronavirus infections again increasing and a national immunization drive stalled with less than 60% of the eligible population vaccinated, fears of a new slowdown have increased.

The U.S. economy contracted 3.5 percent in 2020 amid the pandemic, the largest annual decline of U.S. GDP since 1946, according to data released by the U.S. Commerce Department. But the hole it created in the U.S. job market remains substantial and filling it a focus of the Biden administration and the U.S. Federal Reserve.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *