For quite some time, as the official chronicler of American business cycles announced on Monday.
According to an official statement from the Business Cycle Committee of the National Bureau of Economic Research (NBER), the US economy bottomed out in April 2020, just two months from its previous peak in February 2020.
According to the NBER conventions for chronicle business cycles, a recession begins in the first month after a peak in economic activity and ends in the month of the subsequent depression.
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 downturn is typically one of the three criteria for determining a recession (depth, spread, and duration), the NBER states that “extreme conditions revealed by one criterion may partially offset the weaker indications of another.” .
In this particular case, “the unprecedented magnitude of the decline in employment and production, and its wide scope throughout the economy, justifies designating this episode as a recession, even if it turns out to be shorter than previous contractions”, as the committee rightly predicted in June 2020, when it announced the recession.
Identifying the date of a trough / peak in 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 employment total payroll) Identify turning points in economic activity as precisely as possible.
As the NBER notes, the end of a recession should not be confused with a return to pre-recession economic activity.
“Economic activity tends to be below normal in the early stages of an expansion and, at times, remains well advanced in the expansion.”