The longest economic expansion in U.S. history may see its end due to coronavirus.
The cycle’s peak may have occurred last month, according to Peter Coy, a Bloomberg economics editor. Since then, both the coronavirus that causes COVID-19 and the ensuing economic slowdown has spread around the world, interrupting supply chains and chilling global trade.
“When economic historians look back, they may pick February as the peak of the expansion that began in June 2009,” Coy wrote on Friday.
While the generic definition of a recession is two consecutive quarters of GDP contraction, economists have a more elaborate way of measuring business cycles that tracks economic peaks and troughs.
For that, they turn to the National Bureau of Economic Research, a 100-year-old research firm housed in a five-story office building near Harvard University in Cambridge, Massachusetts. For generations, it’s been cited as the official arbiter of U.S. business cycles.
The peak for this cycle may have been evidenced in the February jobs report issued by the Bureau of Labor Statistics on March 6, Coy said. It showed the unemployment rate holding steady at the previous month’s 3.5%, matching a five-decade low set three other times in the prior six months.
“The February jobs report that just came out is based on household and business surveys conducted in the week containing the 12th of the month,” Coy wrote. “A lot has changed since then.”
On Feb. 12 there were still almost no cases of COVID-19 in the U.S., Coy said. By March 5 there were 99, including 10 deaths, reported to the Centers for Disease Control and Prevention.
Today, more than 750 people in the U.S. have been confirmed to have COVID-19, and 26 have died. The number of people infected may be much higher, as the U.S. has lagged other countries in making testing kits available.
If the economic expansion has ended, it wouldn’t be the first time the U.S. was in a recession without knowing it, he wrote. It also happened in 2008 after the collapse of the subprime mortgage market led to financial instability that spread across the globe.
“In the summer of 2008 policymakers of the Federal Reserve were still predicting decent economic growth for that year and the next – even though a recession had begun the previous December, as later determined by the business cycle dating committee of the NBER,” Coy said.