- [Reporter] In April 2020,
you didn't need to be an economist
to know that the US was in a recession.
The unemployment rates
spiked to 14.7% in April,
up from 4.4% in March,
as most States closed
non-essential businesses
to slow the spread of COVID-19.
It wasn't until June
that the National Bureau
of Economic Research
officially declared a recession.
The question now is
how long do we have to
actually endure a recession?
No one can predict how long,
but understanding the ABC's of recessions
can help you navigate
your economic uncertainty.
This video will explain how
long recessions typically lasts,
including what causes recessions
and what to do during a recession,
whether you've lost your job,
or you're lucky enough to still have one.
So,
how long does a recession last?
The National Bureau of Economic Research
measures the length of recessions
from when the economy peaks
to when it bottoms out.
Once recovery begins,
we're no longer in a recession.
The Bureau started tracking
the length of recessions
in 1857.
The shortest one lasted
six months in 1980,
The longest,
65 months from October
1873 to March, 1879.
The average recession
lasted 17 and a half months.
Many economists define recessions
as two back-to-back
quarters of negative growth
in gross domestic product.
That's the amount of goods and
services we produce overall.
But the Bureau
which officially determines
when a recession begins and ends
also considers factors like
the national unemployment rate,
retail sales and personal income.
A number of things can cause a recession
from a stock market crash
to a housing bubble popping,
to stay at home orders,
shutting down businesses
during a global pandemic.
Because each recession is different,
it's hard to predict how
long it will take to recover.
The best-case scenario
is a V-shaped recovery.
That's a quick economic decline
followed by a quick rebound
to pre-recession levels.
A U-shaped recovery is when
there's a more gradual recovery
after the decline.
A W-shaped recovery is
a roller coaster ride
of two back-to-back
declines and recoveries.
The worst-case scenario
is an L-shaped recovery.
That's a steep economic decline,
and a very slow recovery.
Some economists say The Great Recession
had an L-shaped recovery.
It officially began in 2007,
and ended in 2009.
But GDP never recovered
to what economists had projected
before the great recession,
and unemployment didn't fully
recover until late 2015.
This recession could be similar.
In July, the Congressional
Budget Office predicted that
the unemployment rate will not
reach pre-recession levels,
until 2030.
While that's bad,
the reality is
that the impact of a recession
depends on your situation.
If you're lucky to still have
a job during a recession,
consider these moves.
Commit to saving more money
in your emergency fund.
Even if that means only
making minimum debt payments
for a while.
Also, keep your resume and
LinkedIn profile updated.
You never know when you
may be on the job hunt.
If you already have an emergency fund,
also make investing a priority.
Ignore what the stock market
is doing in a given day.
The market has historically rebounded.
And if you've lost your job,
apply for your state's
unemployment as soon as you can.
Granted, some state unemployment systems
can be really difficult to navigate.
Don't give up.
Apply for a bridge job.
That's pretty much any job
that can bring in money,
even if it's not your field
just to make ends meet for now.
And if you're in a position
to learn a new skill
that will help you land a better job
when the economy recovers,
do it.
No one can say for sure
how long a recession lasts.
Each one is different.
But even when times are tough remember,
recovery will happen.
We just don't know when.
