Recession may have already ended
The longest economic recovery in history ended in February 2020, according to a statement released by the National Bureau of Economic Research this week.
“The committee has determined that a peak in monthly economic activity occurred in the U.S. economy in February 2020,” said a statement by the NBER. “The peak marks the end of the expansion that began in June 2009 and the beginning of a recession. The expansion lasted 128 months, the longest in the history of U.S. business cycles dating back to 1854.”
In reality, the statement just told everyone what we already knew: The coronavirus lockdown caused a historic and unprecedented dislocation of the economy that has seen record-setting declines in jobs, if not incomes.
But that hasn’t stopped liberals from trying to cash in at the expense of president Trump:
“Every recession in the last 40 years was started under a Republican president. Now we have the Trump recession. Trump also bragged about the unemployment numbers Friday. It was all based on faulty numbers,” tweeted Barbra Streisand.
However, most economists are downplaying the significance of the official recognition of the “recession”.
“The important thing here is to realize that this economic predicament was triggered by a health crisis,” said Duke University’s Campbell Harvey. “The economic part is not a structural problem. In 2007, there was a structural problem.”
Harvey says that this recession can be mild and brief “if we get our policies right.”
In fact, we might already have seen the last of the recession and are now in economic expansion.
Last week’s job report showed the country created a record 2.5 million jobs last month when economists were expecting job losses of 7.5 million. Those new jobs, besides being indicators of economic activity, will also generate additional economic activity from transportation, work-related clothing purchase, and sundry items.
“The vast majority of economists feel it is necessary to take a doomsday view because they don’t think there is any benefit to them projecting anything positive, and they all hopped on the negative bandwagon. I’m not one of them,” said Alan Nevin, director of economic research with Xpera Group.
Small businesses apparently don’t talk with economists, either.
The National Federation of Independent Business (NFIB) says that small business owner now expects the recession to be short and are optimist about the future. While consumer income was buoyed by the government during the lockdown, business owners expect that consumers will come out and start spending the record amounts of savings that accrued during the stay-at-home period.
“#Smallbiz optimism increased 3.5 points in May to 94.4, a strong improvement from April. Owners are optimistic about future business conditions and expect the recession to be short-lived,” says the NFIB in a tweet.
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