Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

US recession began in February amid coronavirus pandemic, ending longest expansion in history

National Bureau of Economic Research, which made the official designation, cites ‘unprecedented magnitude’ and ‘broad reach’ of decline. World Bank projects that international economic activity will shrink by 5.2 per cent this year, the deepest global downturn since end of World War II

The US economy entered a recession in February as the coronavirus pandemic struck the nation, a group of economists declared on 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.

During 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.

Financial markets had little reaction Monday to the NBER’s declaration.



February is when the stock market hit its own record high before stumbling into a severe downturn from which it has mostly recovered, thanks to extraordinary stimulus and support measures from the Federal Reserve and Congress as well as expectations that the worst of the economic pain may have passed.

The unemployment rate is officially 13.3 per cent, down from 14.7 per cent in April. Both figures are higher than in any other downturn since World War II. A broader measure of underemployment that includes those who have given up looking and those who have been reduced to part-time status is 21.2 per cent.

On Friday, the government said that employers added 2.5 million jobs in May, an unexpected gain that suggested job losses may have bottomed out. A recession ends when employment and output start to pick up again, not when they reach their pre-recession levels. So it is possible that the recession could technically end soon.

That would make the current recession the shortest and deepest on record. It is expected to be followed by an extended recovery before the economy manages to regain its pre-pandemic levels of production and employment. Some economists say it could take two years or more, with the unemployment rate likely still 10 per cent or higher at the end of this year.

“The most important thing to focus on is the strength of the recovery, and that’s where the greatest uncertainty lies right now,” said Ernie Tedeschi, policy economist at investment bank Evercore ISI.

It is unclear, Tedeschi noted, whether the virus is under control, whether there will be a second wave or whether or when a vaccine will be developed.

On Monday, the World Bank said the world was facing a health and economic crisis that has spread with astonishing speed and will produce the largest shock the global economy has witnessed in seven decades. It expects millions of people to be pushed into extreme poverty.

In its updated global outlook, the World Bank projected that international economic activity will shrink by 5.2 per cent this year, the deepest recession since a contraction in 1945-46 at the end of World War II.

The 5.2 per cent downturn would be the fourth-worst global downturn over the past 150 years, exceeded only by the Great Depression of the 1930s and the periods immediately after World War I and World War II.

In the US, states have begun reopening their economies, thereby allowing businesses to recall some employees to work. But economic activity is returning only very gradually.

A full recovery will not occur until Americans are willing to resume their previous habits of shopping, eating out, and travelling. That might not happen until a vaccine is developed or testing is more widely available.

Diane Swonk, chief economist at Grant Thornton, an accounting firm, said the NBER committee might end up declaring this recession to have already ended in May based on the fact that hiring rebounded that month.

“We could have the shortest recession in history – it seems ridiculous, but we could,” Swonk said. Still, it will take much longer for the economy to rebound, she said.

“This bottom is going to be uniquely deep, and we don’t know how fast we will get out of the bottom,” she said.




Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×