The U.S. economy may have entered a recession even before the federal government began to issue strict coronavirus-related lockdown and social distancing guidelines that forced many businesses throughout the country to close.
According to a new report from the National Bureau of Economic Research, a peak in economic activity occurred during the month of February, which means that is when the 128-month, record-long expansion came to an end and a recession commenced.
The expansion began in June 2009 and is the longest since at least 1854.
In terms of the quarterly peak of economic activity, the NBER alleges that occurred in the fourth quarter of 2019. The fact that the monthly and quarterly peak did not align represents the “unusual nature” of this recession, the NBER said.
Researchers noted that while a recession is usually defined by multiple months of economic contraction, they concluded that “the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy” warranted the designation. Employment and domestic production are the primary indicators used to measure economic activity.
Since February, the coronavirus pandemic has taken a devastating toll on the U.S. economy – more than 42 million Americans have filed unemployment claims as the unemployment rate sits around 13.3 percent.
However, in May – as some state economies began to reopen – the economy added back 2.5 million jobs, an indication that the labor market may be starting to rebound.