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It’s official: The longest expansion in U.S. history ended in February as the economy fell into deep recession, according to the group responsible for making such declarations.
The National Bureau of Economic Research on Monday said a 128-month expansion — the longest dating to 1854 — came to a halt in February. The recession also began the same month.
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The NBER, a private research group led by the nation’s top economists, has long been considered the official arbiter of sorts for determining when business cycles start and end.
The ruling comes as no surprise. The coronavirus began to weigh on the U.S. in February and the pandemic struck hard in March, leading to a nationwide lockdown that shuttered most of the economy. The unemployment rate surged in April to the highest level on record at 14.7% and more than 45 million applications have been filed for unemployment benefits.
Florida workers demand improvements in system for providing unemployment benefits during a record wave of layoffs. A U.S. recession officially began in March.
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The economy has tumbled into such a deep recession that some forecasters predict up to a record 40% decline in gross domestic product in the second quarter. In the first quarter, the economy contracted by 4.8%, one of the deepest declines on record.
A recession is typically defined as two straight quarters of negative GDP, but the NBER has leeway to take into account the depth of a contraction, how quickly it occurs and how much of the economy is affected.
Based on that approach, the group said, the economy entered a recession a few months ago.
With all states reopening again to some degree or another, the economy has probably started to recover. Technically a new expansion might even be underway, meaning the recession has ended. The Dow Jones industrial average DJIA, +1.70% has surged in the past month on the expectation that a rebound was coming.
“For what it’s worth, the recession likely ended in April,” said chief economist Scott Brown of Raymond James. “That just means the economy is growing again — not that the economy has recovered.”
