The National Bureau of Economic Research (NBER), an association of economic researchers, has found that the United States officially entered a recession in February. As reported by The New York Times, the downturn came after a record 128-month long expansion that was followed by various coronavirus-related shutdowns.
Although a recession is typically defined as two consecutive quarters of negative GDP, the NBER also used various other factors — such as domestic production and employment — to come to their conclusion.
“The unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions,” the NBER said in a statement.
Jan Hatzius, Goldman Sachs chief economist, said that the current slump is “almost certainly the deepest recession” since at least World War II. However, Hatzius also noted that it is also likely the shortest, as NBER does not have information on any other recession that lasted less than six months.
“Most economists expect that this recession will be both deep and short, with the economy rebounding as state economies reopen and the world figures out how to function amid the coronavirus pandemic,” The New York Times wrote.
According to the World Bank, the global economy will hit an upturn next year. But it warned that protraction of the pandemic — such as a possible second wave of COVID-19 — could lead to more grim projections. Nevertheless, MarketWatch reported that the U.S. economy has likely entered a recovery period as many states are beginning to reopen their economies.
“The Dow Jones industrial average DJIA, 1.11% has surged in the past month on the expectation that a rebound was coming,” the publication pointed out.
As noted by CBC, President Donald Trump recently expressed optimism for the economy after a jobs report from the Labor Department claimed that United States employers added 2.5 million workers in May — a far cry from the projected loss of 8 million. In addition, the report claimed the U.S. unemployment rate is 13.3 percent, which is almost 2 percent lower than some previous estimates. However, CBC cautioned that it’s still unclear how many jobs were permanently lost amid the pandemic.
The president is hoping to take advantage of the possible economic upturns ahead. As The Inquisitr reported, Trump’s campaign is shifting its message to one of optimism and recovery as the country begins to return to some sense of normalcy.