The longest economic expansion in U.S. history could end because of the coronavirus.
The peak of the cycle may have happened last month, according to Peter Coy, Bloomberg’s economics writer. Since then, the coronavirus that caused COVID-19 and the ensuing economic downturn has spread around the world, disrupting supply chains and crippling global trade.
âWhen economic historians look back, they may choose February as the peak of the expansion that began in June 2009â, Cie wrote Friday.
While the generic definition of a recession is two consecutive quarters of GDP contraction, economists have a more sophisticated method of measuring business cycles that follow economic peaks and troughs.
For this, they turn to the National Bureau of Economic Research, a century-old research company housed in a five-story office building near Harvard University in Cambridge, Massachusetts. For generations, he has been cited as the official arbiter of US economic cycles.
The peak of this cycle may have been highlighted in the February employment report released by the Bureau of Labor Statistics on March 6, Coy said. It showed the unemployment rate held steady at 3.5% the month before, tying a five-decade low set three more times in the previous six months.
âThe just released February employment report is based on household and business surveys conducted during the week containing the 12th of the month,â Coy wrote. “A lot has changed since then.”
As of February 12, there were still almost no cases of COVID-19 in the United States, Coy said. As of March 5, 99, including 10 deaths, had been reported to the Centers for Disaster Control and Prevention.
Today, more than 750 people in the United States have been confirmed to have COVID-19 and 26 have died. The number of people infected can be much higher, as the United States lags behind other countries in making test kits available.
If the economic expansion is over, it wouldn’t be the first time the United States has been in a recession without knowing it, he wrote. This also happened in 2008 after the collapse of the subprime mortgage market leads to financial instability that has spread across the world.
“In the summer of 2008, Federal Reserve policymakers were still forecasting decent economic growth for this year and the next – even though a recession had started the previous December, as later determined by the NBER’s business cycle dating committee. Coy said. .