Markets Soar As US Economy Ends Its Longest Expansion In History, Enters Recession

The U.S. economy put its longest streak of economic expansion behind it in February, as it entered recession due to the COVID-19 pandemic.

What Happened

On Monday, the Business Cycle Dating Committee of the National Bureau of Economic Research, which maintains a chronology of business cycles in the United States, stated that the most recent economic peak was in February 2020, ending a period of record-long expansion that started in June 2009.

The committee concluded that “the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief.”

Why It Matters

The speed at which the decline in the economy has been labeled a recession is noteworthy, as it took just four months to designate the coronavirus induced downturn a recession.

Previously, when the economy started declining in late 2007, the committee took a year to announce a recession, according to Reuters.

Meanwhile,  the markets have shrugged off the recession, as the NASDAQ is on track for the quickest recovery from the lows it hit earlier this year. The index closed 1.13% higher at an all-time high of  9924.75 on Monday.

The S&P 500 also recovered all the losses for 2020, closing at 3,232.39, higher by 1.20% for the day.