Despite recent tweets from Donald Trump about the economy, the National Bureau of Economic Research announced that the United States has officially been in an economic recession since February. While critics argue that a recession is based on two consecutive months of economic decline, the NBER, which serves as the official authority on recessions, defines it as, “a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators.”
This recession breaks a 128-month long record of economic expansion, which began in June 2009, the longest recorded in history. It comes as no surprise considering February marked the beginning of the coronavirus pandemic, causing shutdowns worldwide to help reduce the spread of the disease. By March, an estimated 20 million jobs were lost, increasing the unemployment rate to record numbers.
Surprisingly, despite the recession, the stock market continues to soar, although analysts are predicting the GDP to plunge by forty percent in the second quarter. If correct, the US is close to a collapse, as seen during the Great Depression. The volatility of the market today is unpredictable and likely to burst. According to reports, chief investment strategist at CFRA Research, Sam Stovall, states, “This was a man-made recession-slash-bear market where, in a sense, there was almost no uncertainty about what was going to happen to us. The only question was, how deep would it go.”