The U.S. economy entered a recession in February as the coronavirus struck the nation, a group of economists declared Monday, ending the longest expansion on record.
The economists said that employment, income and spending peaked in February and then fell sharply afterward as the viral outbreak shut down businesses across the country, marking the start of the downturn after nearly 11 full years of economic growth.
A committee within the National Bureau of Economic Research, a trade group, determines when recessions begin and end. It broadly defines a recession as “a decline in economic activity that lasts more than a few months.”
For that reason, the NBER typically waits longer before making a determination that the economy is in a downturn. In the previous recession, the committee did not declare that the economy was in recession until December 2008, a year after it had actually begun. But in this case, the NBER said the collapse in employment and incomes was so steep that it could much more quickly make a determination.
“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 panel said.
The way the NBER defines recessions, they begin in the same month that the previous expansion ends. Because the economy peaked in February, that is the month when the recession officially began, rather than in March, when unemployment began to rise.
