Photo: laverdadnoticias.com
By Isaac Cohen*
The National Bureau of Economic Research (NBER) is a private, non-profit and non-partisan entity charged with determining when recessions begin and end in the United States. For that purpose, it maintains a chronology of the peaks and throughs of US business cycles and defines a recession as “a decline in economic activity that lasts more than a few months,” considering “the depth of the contraction, its duration, and whether economic activity declined broadly across the economy.” https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021
In normal times, some analysts hold that at least two consecutive quarters of contraction, or negative growth, are required to call it a recession. However, this time it was different, because the peak in economic activity was reached in February 2020 and the trough occurred the following April, that is “the recession lasted two months, which makes it the shortest US recession on record.”
The fact that it was short did not ignore that the downturn was abrupt, profound and vertiginous. In those two months, in the United States 22 million jobs were lost, unemployment reached almost 15 percent and the economy contracted by 10 percent. As described by the Bureau, “the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warranted the designation of this episode as a recession, even though the downturn was briefer than earlier contractions.”
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
