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Brian Cheung of Yahoo Finance reports the latest news from the National Bureau of Economic Research report on the 2020 US recession and Biden’s remarks regarding inflation and economic recovery.
Video transcript
ALEXIS CHRISTOFOROUS: Happy to see you again. The official body responsible for reporting recessions said today that the pandemic-induced recession in the United States actually ended in April of last year – just two months after it began. Brian Cheung from Yahoo Finance here with more. And I think a lot of people who hear that might blame them, Brian.
BRIAN CHEUNG: Yeah, well, the reason is it took them 15 months later to report it. But the National Bureau of Economic – rather, the National Bureau of Economic Research tends to be pretty conservative about the appeal of this stuff. They want to make sure they have enough data to say with confidence that a recession started or ended at a certain time.
But people who watched this space will remember that it was last June when the NBER said the recession started in February 2020. And now here we are in July 2021, and they are now saying April 2020 was at the end of the day. official end of the recession, at least from an economic point of view. Obviously, the human damage extended far beyond that. But the two-month economic recession, as declared by the NBER, is officially the shortest on record in the United States.
And the NBER said it was looking at things specifically like unemployment. If you look at an unemployment graph, it’s very obvious that the highest unemployment rate we saw during the pandemic was in April 2020. The same is true for non-farm payroll levels.
Now the NBER has said it is difficult to look at things like GDP, which is generally a measure they prefer to look at in terms of economic activity because the COVID crisis is evolving so rapidly. And people who are in the world of economic data understand that GDP comes out on a quarterly basis. So these data points just weren’t frequent enough for them to draw that conclusion.
Now look at what they said in today’s release. They said, citing: “The committee concluded that the unprecedented scale of the decline in employment and production and its wide reach throughout the economy justified the designation of this episode as a recession, although the slowdown was shorter than the previous contraction. ” So the NBER in the statement also acknowledges that this is unlike anything else they have seen and tried to date. So very interesting comment on that of the NBER, again Alexis, stating that the recession officially ended in April of last year.
ALEXIS CHRISTOFOROUS: Okay, better late than never for this news. And also, I want to quickly address President Biden in remarks – public remarks made this morning. He weighed on inflation and also sent a message to Fed Chairman Jay Powell. What did he have to say?
BRIAN CHEUNG: Yeah, well, in the kind of response to impressions of high inflation that we’ve had recently, the President speaking to the media earlier today and saying the White House isn’t necessarily concerned about the inflation leak, especially nothing in the air of the hyperinflations of the 1970s. But listen to what he told reporters earlier this morning regarding how he talks specifically with the Federal Reserve on these issues as well. .
JOE BIDEN: Let me be clear, my administration understands that if ever we were to experience uncontrolled inflation over the long term, it would pose a real challenge to our economy. So, even though we are convinced that this is not what we see today, we will remain vigilant as to any necessary response. As I made clear to Federal Reserve Chairman Powell during our recent meeting, the Fed is independent to take whatever action it deems necessary to support a strong and lasting economic recovery.
BRIAN CHEUNG: And that’s very much in line with what I’ve heard from sources in the White House who have said that, yes, those inflationary impressions are, indeed, mind-boggling on a headline basis, but that when you watch things as five- breakeven points of the year, this inflation does not necessarily concern them, at least from a market point of view, which should give the administration perhaps a little leeway, in particular on this agreement d infrastructure, Alexis.
ALEXIS CHRISTOFOROUS: Okay, Brian Cheung, thank you very much.
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