WASHINGTON – The US economy was in recession for two months last year at the beginning of the Covid-19 pandemic as businesses shut their doors nationwide and laid off employees, the committee making the determination said yesterday.
Economic activity peaked in February last year and hit its trough the following April, making the recession that began in March the shortest on record, according to the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a non-profit, non-partisan research organisation.
The downturn suddenly ended 128 months of expansion in the world’s largest economy as cities and states nationwide ordered businesses to close or curtail operations to stop the spread of Covid-19.
However, increases in employment and economic growth that occurred from May last year onwards cut the recession short, the NBER said.
“The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession associated with the February 2020 peak. The basis for this decision was the length and strength of the recovery to date,” it said in a statement.
The pandemic caused horrific damage to the world’s largest economy, with government data showing 22 million jobs lost between February and April last year, and GDP contracting 31.4%, annualised, in the second quarter, when the restrictions were at their worst.
However, the economy resumed expansion in May last year, the NBER said, and in the year since has recovered ground.
The IMF predicts the US economy could expand 7% this year, its fastest pace since 1984, after collapsing 3.5% in 2020, its worst year since modern record keeping began in 1946. – AFP, July 20, 2021
