(CNN) — The longest economic expansion in American history is officially over. The National Bureau of Economic Research declared Monday that the recession began in February.
The economy collapsed so rapidly that NBER wasted no time in announcing a recession, a stark contrast to previous downturns when the body took upwards of a year to declare what most people already knew.
Social distancing requirements imposed to fight the pandemic have crushed broad swaths of the US economy, from airlines and cruise ships to restaurants and Broadway shows.
“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,” NBER wrote.
More than 42 million Americans have filed for unemployment benefits. Major companies including JCPenney, J.Crew and Hertz have filed for bankruptcy. And economists are predicting GDP imploded at an annualized rate of 40% during the second quarter.
The pandemic marked an end to the mediocre but long recovery from the Great Recession. In July 2019, that expansion officially became the longest period of uninterrupted growth in US history dating back to 1854. It spanned 128 months, easily breaking the prior record of 120 months set between March 1991 and March 2001 during the dotcom boom.
Normally, economists define a recession as consecutive quarters of negative growth. The United States already endured one quarter of a shrinking economy, with GDP dropping by 5% during the first quarter.
NBER decided not to wait for a second quarter of a contracting economy, although it is widely expected to happen during the second quarter. The body also declared that while the economy peaked on a monthly basis in February, the quarterly peak happened in the fourth quarter. That disparity “reflects the unusual nature of this recession,” NBER said.
“The economy contracted so sharply in March,” NBER said, that by the first quarter GDP and employment was “significantly below” the levels of the fourth quarter of 2019.