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NBER confirms recession began in February

The National Bureau of Economic Research has determined that a peak in monthly economic activity occurred in the U.S. economy back in February 2020.

Video Transcript

JULIE HYMAN: Speaking of inflection points, we have some breaking news now, Dan, on the recession. The National Bureau of Economic Research is the body that sort of formally says whether we've entered a recession. They said we entered a recession in February, that that was the peak of economic activity that ended the longest expansion in US history of 128 months. That's going back in history to 1854. That's when they started dating these economic cycles. Adam, so this-- I mean, the NBER, they tend to confirm what we already suspect. But still, it's a significant finding.

ADAM SHAPIRO: Well, your kids aren't 13 yet. But if they were, I imagine they would respond with duh. I mean, let's be honest here. And we're going to have all these discussions about recessions are two quarters of negative growth. You know, this is where we're headed with this. The fact is, a recession begins when a colleague, a friend, or a relative either takes a pay cut or loses a job for most people because you get that fear factor. But yes, economically, there are certain criteria that have to be met. The question is, what do we do with it? And that question is lying on Capitol Hill right now. What are they going to do with it?

RICK NEWMAN: Adam, you don't have a-- you need a softer spot for economists, man. I spend a lot of time looking at those NBER--

ADAM SHAPIRO: It's my dad's major.

RICK NEWMAN: Yeah, I mean, so you know, the other important thing here is when will they declare that we've actually exited the downturn? And it's always backward looking because it takes a while to figure this out. This is important. I mean, it does tell us what's happening in the economy. And one interesting thing here is they declare the end of the expansion on both a monthly and a quarterly basis. So the monthly end was in February, as Julie said. But they said the quarterly end to the expansion was actually the fourth quarter of 2019, suggesting that we were perhaps in a little bit of trouble even before the coronavirus hit. So I think we'll see some more analysis of that coming.