The US recession ended in April 2020, making it the shortest period ever

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WASHINGTON, July 19 (Reuters) – The recession in the United States caused by the coronavirus only lasted for two months, ending at a low point in April 2020 after beginning a sharp decline in economic activity in March of that year, according to the U.S. business cycle that dating history. The commission announced Monday.

The committee, a group of macroeconomists setting start and end dates for US business cycles, said that while the country was by no means ready to return to normal operating capacity at that point, the indicators for both jobs and production “clearly point to April 2020. As the month of the bottom”, with the beginning of a rebound in May.

In fact, the resumption of growth was so rapid, that the committee said it was the “unprecedented magnitude of the decline” that led members to think of what happened as a recession in the first place, with a downturn typically requiring “depth, duration and spread.” to qualify for the designation.

About 22 million jobs disappeared from corporate payrolls in March and April of that year, an event that raised fears of a new depression and prompted Congress and the White House to approve the first of several massive relief packages to keep businesses and families afloat.

Determining when a recession will end is of historical interest, but it is also relevant to research on the dynamics of business cycles and, in this case, how that historical policy response has performed.

The announcement makes the pandemic recession by far the shortest on record, at just two months, a third of the six-month contraction period at the beginning of 1980, and fourth as long as the recession that followed the collapse of the tech bubble in 2001.

That alone may fuel the arguments for the “cash first” approach that fiscal policymakers have taken to combat the pandemic through recurring family support payments, expanded unemployment benefits, and liberal financing for small businesses.

It also highlights the debate still open about how quickly the US economy will return to normal, and what that means. By analogy with the output, the country may have already recovered; By analogy with employment, it is still very short, with the largest economic scars threatening lower wages and less educated workers.

Amid what has become a divisive national conversation about masks and lockdowns, about 2.8 million people were returned to work in May of 2020, and over the next year about 15 million jobs were restored. More than 7 million jobs are still missing.

Employment “hit its lowest level in April before rebounding strongly in the next few months and then stabilizing in a gradual increase” with incomes also rising, the committee said in a statement released by the National Bureau of Economic Research.

With coronavirus infections on the rise again and the national immunization campaign halted with less than 60% of the eligible population vaccinated, fears of a new slowdown have increased.

The S&P 500 (.SPX) and Dow Jones Industrial Average (.DJI) were down more than 2% by midday, and 10-year US Treasury yields fell to a 5-month low. Read more

(Reporting by Howard Schneider) Editing by Nick Czyminski

Our Standards: Thomson Reuters Trust Principles.

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