US entered recession in February as coronavirus derailed economy: NBER

The U.S. entered a recession in late February as the outbreak of the coronavirus pandemic derailed a record stretch of U.S. growth, according to the non-profit research group that charts U.S. business cycles.

The National Bureau of Economic Research (NBER) said Monday that the collapse of U.S. economic activity in February marked the formal end of the recovery from the Great Recession and the beginning of another protracted downturn.

NBER typically defines a recession as two consecutive fiscal quarters — or roughly 180 days — of consistent economic retraction. While the coronavirus-driven downturn has only lasted slightly more than three months, NBER said the depth and unprecedented speed of the collapse “warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions.”

The pandemic-driven recession marked the end of the longest economic expansion in recorded U.S. history, according to NBER. The recovery from the Great Recession spanned 128 months from June 2009 until February 2020, pushing the unemployment rate to a 50-year low of 3.5 percent.

The outbreak of the coronavirus pandemic in the U.S. forced thousands of businesses to close or severely restrict operations, prompting millions of layoffs. The pandemic drove the unemployment rate as high as 14.7 percent and forced more than 21 million Americans out of work by April, though the economy regained 2.5 million jobs in May.

While the U.S. has shown signs of recovery in the past two months, economists warn that the U.S. still faces signifiant obstacles to a full rebound and a slew of risks that could that make it harder to dig out from the downturn.

The state of the economy is also expected to play a crucial role in the upcoming election, where President Trump will seek to win a second term amid an unprecedented economic collapse.

Trump had long counted on a strong economy to defend his 2016 victories in Michigan, Wisconsin and Pennsylvania— three states that reliably supported Democratic presidential nominees until the previous election. Those three states had experienced one of the slowest recoveries from the Great Recession and are among the hardest hit by the coronavirus downturn.

Former Vice President Joe Biden, the presumptive Democratic presidential nominee, has pinned the downturn on Trump’s response to the first COVID-19 cases found in the U.S. While other countries such as South Korea and Japan were able to stave off national lockdowns, the lack of widespread U.S. testing capacity prevented the country from isolating coronavirus cases and forced widespread businesses closures.