The rebound in jobs, production and consumer spending in recent months strongly indicates that the recovery from the harsh Covid-19 recession is underway.
Just as government-mandated lockdowns sent the economy into a tailspin in March and April, the lifting of restrictions and the reopening of businesses propelled activity higher in May and June.
The healing process has begun. With important economic data for May now in the books, it looks like the economy hit bottom in April.
The coronavirus recession has hit the U.S. with tremendous force. Following the sizeable 4.8 percent contraction in GDP during the first quarter – putting an end to the longest expansion on record—activity is poised to plunge by a depression-like 30-40 percent annual rate in the second quarter.
The Covid-19 recession continues to wreak havoc on all sectors of the U.S. economy. Assuming 10-12 weeks of social-distancing and shelter-in-home restrictions from mid-March, the economy is poised to suffer the worst contraction during the second quarter than any time World War 11.
It won’t be confirmed for at least several months, but the U.S. is almost certainly hurtling into a recession. A little over a month ago, when the Covid-19 coronavirus first hit the headlines we, along with most economists, thought the nation could weather the storm if proper policies were quickly implemented
During this record-long expansion, now in its eleventh year, the economy has struggled through seven episodes in which its growth engine has downshifted sharply – to about 1 percent or less for a given quarter.
The economy ended 2019 with a bit more momentum than expected, as consumers ramped up spending and home construction soared to a 13- year high in December.
As the curtain rings down on 2019, the year will be remembered for a number of hits and misses. Perhaps the biggest hit is that the economy completed a marathon, having outlasted all previous expansions by at least six months and still going.