Last year’s COVID-19 recession lasted just two months, according to an economic research organization that is a recognized arbiter of U.S. business cycles.
The trough of the 2020 recession was in April, following the previous peak of economic activity in February, making the two-month downturn the shortest U.S. recession on record, the Business Cycle Dating Committee of the nonpartisan National Bureau of Economic Research (NBER) said Monday. The previous shortest recession occurred in the first half of 1980 and lasted six months, NBER said. The “Great Recession,” which started in January 2008, lasted 18 months.
NBER defines the peak month as the one when various economic indicators reach their highest level, followed by a significant decline in economic activity. A month is designated as a trough when economic activity reaches a low point and begins to rise again for a sustained period.
In March 2020, the government shut down most businesses and ordered people to stay home as much as possible to slow the spread of COVID-19. Economic growth came screeching to a halt, ending a record 128 months of expansion. First-quarter gross domestic product (GDP) that year contracted at an annual rate of 5% and plunged 32.9% the next quarter, while the unemployment rate surged to 14.8% in April—the highest rate since data collection began in 1948.
But the economy rebounded sharply after that, registering 33.1% GDP growth in the third quarter of 2020 and 4% in the next. With the help of vaccine rollouts, the economy has continued to recover ever since, recording first-quarter growth this year of 6.4%. The unemployment rate fell to 5.8% in May—12 months after May 2020 marked the first month of the post-recession expansion.
“The recent downturn had different characteristics and dynamics than prior recessions,” NBER said in a statement. “Nonetheless, the committee concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warranted the designation of this episode as a recession, even though the downturn was briefer than earlier contractions.”
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