Before the pandemic, the shortest recession occurred in the 1980s, lasting six months.
Nationwide shutdowns began in March last year. Companies have closed, laying off millions of Americans. Schools have switched to distance learning, forcing even more people out of work. All of this has plunged the US economy into a deep hole.
Economic activity, measured by gross domestic product, contracted at an annual rate of 5% in the first three months of 2020 – and to a record 31.4% in the following quarter. During this period, America lost more than 20 million jobs.
But the low point of the recession came in April 2020, and the economy quickly began to recover, according to Monday’s NBER report. The NBER defines the first month of a recession as the period after the peak and the last month of the recession as the trough. So just because the US economy is no longer in a recession does not mean that it has fully recovered.
The back to normal index created by CNN Business and Moody’s Analytics stood at 91% as of July 16. Even though the economy has already gained ground, the remaining 9% may be harder to reach as the economy has fundamentally changed. Some of the jobs lost last year may never come back. Economists are also predicting that it will be some time before air travel returns to levels seen before the pandemic.
And cases of Covid-19 are on the rise again around the world, complicating the economic recovery. The recession may be over, but the recovery is far from complete.