The pandemic recession was the shortest on record in the United States
For some time, as the official columnist of US economic cycles announced on Monday.
According to an official statement from the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), the US economy hit a low in April 2020, just two months from its previous peak in February 2020.
According to NBER conventions for chronicling economic cycles, a recession begins the first month after a peak in economic activity and ends the month of the following trough.
In this case, that means the Covid-19 recession only lasted two months, making it the shortest on record.
While the prolonged duration of an economic contraction is generally one of the three criteria for determining a recession – depth, spread and duration – the NBER states that “the extreme conditions revealed by a criterion may partially compensate for the weaker indications of another”.
In this particular case, “the unprecedented scale of the decline in employment and production, and its wide impact on the economy as a whole, justifies the designation of this episode as a recession, even if it is turns out to be shorter than previous contractions, “as the committee correctly predicted in June 2020, when it announced the recession.
Identifying the date of a trough / peak of economic activity is a complex task carried out by the Business Cycle Dating Committee, a panel of 10 renowned economic researchers, which involves weighing the behavior of various indicators (for example, real GDP and total salaried employment) to identify as precisely as possible the turning points in economic activity.
As the NBER notes, the end of a recession should not be confused with a return to pre-recession economic activity.
“Economic activity is generally below normal in the early stages of an expansion, and it sometimes stays so well in the expansion.”