A committee of eight prominent economists made it official on July 19th. The covid-19 recession, America’s deepest since the Depression, was also its shortest, spanning just March and April 2020. That tests the very definition of a recession, which the National Bureau of Economic Research describes as “a significant decline in economic activity that is spread across the economy and lasts more than a few months”. A recession it was judged nonetheless, given its breadth and extraordinary depth. The plunge in output in the second quarter of 2020 was more than three times the second-largest quarterly drop in America’s post-war history.
The rebound in gdp, thankfully, has been comparably dramatic. The 33.8% annualised rate of growth notched in the third quarter of 2020 was about twice as fast as the second-best quarterly performance in the post-war era. As the Bureau of Economic Analysis reported on July 29th, output overtook its pre-pandemic level in the second quarter of this year. Though unique in some ways, this unfolding recovery resembles past recoveries in other important respects.
