The pandemic sparked recession ended in April 2020 after just two months, according to the National Bureau of Economic Research. That makes the most recent US economic downturn the shortest on record.
Before the pandemic, the shortest recession was in the 1980s, lasting six months.
Last year, nationwide lockdowns began in March. Businesses closed their doors, laying off millions of Americans. Schools went to remote learning, forcing even more people out of work. All of that plunged the US economy into a deep hole.
Economic activity, measured through the gross domestic product, contracted at an annual rate of 5% in the first three months of 2020 — and at a record 31.4% in the following quarter. During that period, America shed more than 20 million jobs.
But the low point of the downturn occurred in April 2020, and the economy quickly began to recover, according to Monday’s NBER report. NBER defines the first month of a recession as the period following the peak, and the last month of the recession by the trough. So the fact that the US economy is no longer in recession does not mean 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 regained significant ground, the remaining 9% might be tougher to achieve as the economy has fundamentally changed. Some of the jobs that were lost last year might never come back. Economists also predict that it will take some time before air travel returns to levels seen before the pandemic.
And Covid-19 cases are on the rise again around the world, complicating the economic recovery. The recession might be over, but the recovery is far from complete.