The U.S. economy entered a recession in February, a group of economists declared Monday, ending more than a decade of steady if slow growth.
The economists said employment peaked in February and fell sharply afterward, marking the beginning of the downturn.
A committee within the National Bureau of Economic Research, a trade group, determines when recessions begin and end. It defines a recession as “a decline in economic activity that lasts more than a few months.”
The committee acknowledged, however, that in this case the depth of the economic downturn so far also played a role in its decision.
For that reason, the NBER typically waits longer before making a determination that the economy is in a downturn.
“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.
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The unemployment rate is officially 13.3 percent, down from 14.7 percent 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’s possible that the recession could technically end soon.
AFRICA DAILY NEWS, NEW YORK
