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The shortest recession in U.S. history officially ended in April 2020

Agence SAND

The business cycle dating committee of the National Bureau of Economic Research (NBER) has delivered its verdict: the recession that began following the Covid-19 restrictions in February 2020 ended two months later, in April. This makes it the shortest recession in over 150 years, with the previous record holder being the 1980 recession that lasted six months.

To put dates on economic recessions, the NBER examines a broad range of indicators including industrial production, employment, real personal income and retail sales. A recession begins when these indicators start to fall and ends when their low points have been reached and the indicators start to recover.

OUR ANALYSIS

The latest recession, in addition to being the shortest ever, is also an historical first because it was entirely exogenous. Due to its unusual nature, the various indicators examined by the NBER are taking quite different lengths of time to reach their various pre-recession highs. While retail sales exceeded their February 2020 level the following June, it is only in recent months that non-transfer income has fully recovered. Meanwhile, GDP probably exceeded the fourth-quarter 2019 level in the second quarter of 2021 and industrial production is just 1% below that of February 2020. In contrast, employment remains 4% below its pre-crisis rate and took five years to exceed its previous high following the 2008–09 recession.

See also: https://lazardfreresgestion-tribune.fr/en/automotive-sector-component-shortages-are-disrupting-vehicle-production/

The following opinion was written on July 21 2021 and is susceptible of changing.

Sources : Bloomberg, and calculation from Lazard Frères Gestion

As of : 21 July, 2021.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS. LAZARD FRERES GESTION – a simplified joint stock company with share capital of €14,487,500 – Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES – 75008 PARIS, FRANCE

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