Shortest Recession In History Sets Up Next Recession

It’s now official that the recession of 2020 was the shortest in history.

According to the National Bureau of Economic Research, the contraction lasted just two months, from February 2020 to April 2020. However, during those two months, the economy fell by 31.4% (GDP), and the financial markets plunged by 33%. Both of those declines, as shown in the table below, are within historical norms.

Shortest Recession In History, #MacroView: Shortest Recession In History Sets Up Next Recession

Here it is graphically. The chart shows the historical length of each recession and the corresponding market decline.

Shortest Recession In History, #MacroView: Shortest Recession In History Sets Up Next Recession

However, while the effects of the “recession” were all within historical norms, the recession itself was not.

Let me explain.

A Non-Standard Recession