Off The Wire
Recession ended in April 2020, making it shortest on record
WASHINGTON, July 19 (Reuters) - The recession touched off by the coronavirus lasted only two months, ending with a "trough" reached in April 2020 just one month after the sharp drop in economic activity in March of that year, the U.S. Business Cycle Dating Committee announced Monday.
The committee, a group of macroeconomists who assign the start and end dates of U.S. business cycles, said that while the country had by no means gotten back to normal operating capacity at that point, indicators of both jobs and production "point clearly to April 2020 as the month of the trough," with a rebound beginning in May.
Indeed, the resumption of growth was so rapid the committee said it was only "the unprecedented magnitude of the decline" that led members to consider what happened to be a recession in the first place, with a downturn typically requiring "depth, duration and diffusion" to qualify for the label.
Around 22 million jobs disappeared from company payrolls in March and April of that 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.
Amid what became a divisive national conversation over masks and lockdowns, during May 2020 2.8 million people were brought back to work, and over the next year about 15 million jobs were recovered.
Jobs "reached a clear trough in April before rebounding strongly the next few months and then settling into a more gradual rise," with incomes rising as well, the committee said in a statement released through the National Bureau of Economic Research.
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. There have been several 8 month recessions, including the one that followed the collapse of the bubble in technology stocks in 2001.
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.
Nor is the battle over. Coronavirus infections are again increasing as the Delta variant takes hold and a national immunization drive stalls with only about 57% of those eligible having been fully vaccinated.
This year may still see the fastest expansion of economic activity in 40 years, but rekindled fears about the pandemic on Monday hit markets hard. The S&P 500 and the Dow Jones Industrial Average were both down more than 2% by midday, and U.S. 10 year Treasury yields fell to a 5-month low. read more