ISSUES AND INSIGHTS.COM
It’s official: The U.S. economy, battered by the sharp economic reaction to the coronavirus pandemic, plunged into recession in February. That’s the bad news. The good news? The economic recovery likely has already begun. “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 National Bureau of Economic Research, the group that dates all U.S. recessions, announced Monday. In short, that means 11 years of recovery and expansion ended in February. Since the average recession lasts about 11 months, the question among economists, as always, is: Will this be a U-shaped (slow) recovery, or a V-shaped (quick) recovery? We’re not paid prognosticators here at I&I. But given recent economic signs of life, it seems likely we’re now on the verge of a recovery, if we’re not already in one. After three months of mandated economic shutdowns, the economy seems to be roaring back to life, even as the nation is roiled by angry protests over the May 25 death of George Floyd at the hands of Minneapolis police.