The National Bureau of Economic Research (NBER) announced on September 20, 2010 that June 2009 marked the trough in business activity in the United States. NBER is the semi-official custodian of the economic cycles in the U.S.
The trough in business activity indicated that the recession that started in December 2007 had ended ushering in a period of economic expansion. Determining the actual date of a peak/trough in the country’s economic activity is a daunting task done by the Business Cycle Dating Committee.
The Committee comprises of 10 renowned economic researchers. They weigh the behaviour of multiple indicators to determine the turning points in economic activity as precisely as possible.
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Ever since the September 2010 announcement, the Committee has remained quiet. They have not said a word because the economic expansion begun in June 2009 and it is continuing. In July 2019, it became the most extended growth cycle ever recorded in the United States.
Is this the end?
Fears of a global recession are escalating with the coronavirus spreading around the world, including within the United States. The latest pandemic appears to be threatening the growth streak.
The U.S. might still avoid sliding into a recession even if the outbreak hits the global economy considerably. When compared to the European zone that had been continuously drifting towards a financial downturn even before the outbreak hit, the U.S. economy appears robust.
With the Fed still having room to cut rates, it may prove essential in preventing a downturn. The chart below shows that the current economic expansion is the longest up to today, with the cycle that lasted from March 1991 to March 2001 coming in second.
The cycle that ended in 2001 culminated in the bursting of the much-hyped dot-com bubble. The current expansion is categorized as one of moderate growth compared to the many other shorter cycles of the past.
The ongoing upturn is the second slowest since the end of the 2nd World War with average annual GDP growth of 2.3%.
