It is now official — the National Bureau of Economic Research has declared that economic activity peaked in February of this year. That means the expansion that started in June of 2009 is now over, and we are officially in a recession.
In the past, the NBER has watched an economic decline for much longer before officially declaring a recession. But Teresa Ghilarducci, professor of economics and policy analysis at The New School in New York City, said this is no ordinary contraction.
“It would have been a bit ridiculous to wait to tell the world what we already knew and felt,” she said.
The NBER said the magnitude of production and employment declines warranted the official designation. Ghilarducci said what’s different this time is how quickly we went from full employment to double-digit rates of unemployment.
“It took two years in the 1930s to get to the kinds of rates that we’re seeing now,” Ghilarducci said.
In previous recessions, economist Peter Orazem at Iowa State University said unemployed people jumped to other jobs in less-affected industries. But this has been a nearly universal shutdown.
“That’s going to make it much more difficult for people to shift from one job to another as a way of surviving the economic consequences of the pandemic,” Orazem said. That could make it even harder to recover, he said.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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