Economy

Trump’s Recession Predates Pandemic Spread, Lockdowns

Written by SK Ashby

Unofficially, we already knew the economy has been in recession, but the recession actually began sooner rather than later according to the committee tasked with declaring recessions.

The Business Cycle Dating Committee of the National Bureau of Economic Research says the recession began in February which puts it slightly ahead of our wider outbreak.

From the Associated Press:

The economists said employment peaked in February and fell sharply afterward, marking the beginning of the downturn. [...]

“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 NBER panel said.

The unemployment rate is officially 13.3%, down from 14.7% in April. Both figures are higher than in any other downturn since World War II. A broader measure of underemployment that includes some of the unemployed who have given up looking and those who have been reduced to part-time status is 21.2%.

The coronavirus pandemic was already ravaging other parts of the world in February, but infections did not explode out of control in the United States, and state economies did not go into lockdown, until the middle of March.

Perhaps it only appears this way to my untrained eye and I'm missing something, but the drop in consumer demand from other parts of the world was evidently enough to push the economy into recession even before our own economy widely shut down. New York state, which saw the worst of the virus and represents a significant chunk of the overall economy, did not go into lockdown until March 20th. California went into the lockdown on March 19th. Other states followed in April or nearly two months after the recession began. Some states didn't go into lockdown until May or nearly three months later.

There's a reason I'm quick to point out that the economy was not exactly "great again" even before the coronavirus existed.

The economy was only forecast to grow by 1.2 to 1.5 percent this year when things were still relatively normal or "good." A global pandemic would have driven the economy into a recession in any case, but Trump's policies had already placed the economy in a vulnerable position long before the virus infected the first American.