The National Bureau of Economic Research said that the United States economy has entered into a recession, ending a historic economic expansion that lasted 128 weeks. The NBER said the economy peaked in February and that the economic impact of the coronavirus pandemic wiped out all the gains made in January and February.
The NBER said that while a recession is usually marked by two consecutive quarters in which there is a decline in economic growth, the coronavirus pandemic is a unique circumstance in which there was a “significant decline in economic activity” across the board.
“The committee recognizes that the pandemic and the public health response have resulted in a downturn with different characteristics and dynamics than prior recessions,” the NBER’s Business Cycle Dating Committee said in a statement. “Nonetheless, it concluded that 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.”
U.S. GDP dropped by 5% in the first quarter, and according to CNBC, economists expect the GDP to contract by as much as 50% in the second quarter.
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