United States officially in an economic recession

The National Bureau of Economic Research announced on Monday that economic growth was halted in February, and since then, we've seen a decline in industrial production, real income, employment, and wholesale-retail sales.

Posted: Jun 9, 2020 9:07 PM
Updated: Jun 10, 2020 9:30 AM

FORT WAYNE, Ind. (WFFT) - Money makes the world go round isn’t just a saying. We spend money and drive the economy forward.

After 128 months of economic expansion, the longest period of expansion since 1854, the National Bureau of Economic Research said on Monday that the United States is officially in an economic recession.

Economists say we began to see a slowing down of the economic expansion taking place in February.

The COVID-19 pandemic is believed to have been an accelerator of the recession.

Heather Tierney, Ph.D, assistant professor of economics at Purdue Fort Wayne says consumer spending is about 70% of our GDP.

"We are a heavy, heavily reliant economy on consumer spending and that’s proving to be problematic."

When the COVID-19 pandemic hit, businesses were forced to close.

People lost their jobs or had to take pay and hour cuts, which then reduced income, and many shops closed for safety, limiting wholesale-retail sales.

Seeing a reduction in those four areas, industrial production, real income, employment, wholesale-retail sales is how the National Bureau of Economic Research determines if we’re in a recession.

Northeast Indiana and Northwest Ohio’s economy is, in large part, industrial production.

Rachel Blakeman, director of the Community Research Institute at Purdue Fort Wayne says to turn things around, we have to rely not just on local economic recovery, but national as well.

"Not only do we make pickup trucks for people who buy them here in Allen County, we make pickup trucks that are bought across the United States," Blakeman said. "We want to make sure there’s a market for pickup trucks, for steel, for medical devices, for recreational vehicles. Those are some of the drivers of our local economy."

We have seen a slow improvement in one of the four areas, employment.

According to the latest jobs numbers, unemployment in Northeast Indiana for the month of April ranges anywhere between 15% to 29%, depending on the county.

Nationally, Tierney said the unemployment rate between April and May is expected to improve by about 1% from the current 14.4% rate.

Tierney says that’s partly due to the government.

"The Payment Protection Program turned out to be a success. So, employers started hiring back their employees, and also the stimulus payment," Tierney explained.

However, to turn the recession into expansion, Tierney believes battling COVID-19 to a point where people feel safe to go out and spend their money will be the key.

"We have to increase the flow of money within the economy because one person’s spending becomes another person’s income," says Tierney.

Historically, Blakeman says this recession is unlike any we've seen in modern times. She said, "This will be a point in time in economic history that will be studied for decades to come."

However, Tierney explained that if we do have to go back into lockdown, it’ll have a negative ripple effect on the economy and it could be even worse than it is now.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 68433

Reported Deaths: 2980
CountyConfirmedDeaths
Marion14863719
Lake7101271
Elkhart459777
Allen3635158
St. Joseph315479
Hamilton2513104
Cass17519
Hendricks1750105
Vanderburgh172612
Johnson1652118
Porter119539
Tippecanoe110311
Clark108145
Madison84765
LaPorte83829
Kosciusko81912
Howard81065
Bartholomew74347
Marshall74222
Floyd69444
Monroe68630
Delaware63852
Noble63728
Boone63546
Dubois62612
Hancock62337
Jackson5524
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Warrick51630
Shelby51126
Grant49629
Vigo47410
Dearborn46528
Morgan42532
Henry36118
Clinton3573
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Montgomery34321
Lawrence32827
Wayne3179
Decatur31432
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Scott25010
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Greene23934
Franklin22410
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Steuben2003
Ripley1887
Perry17212
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Fayette1557
Jefferson1492
Whitley1486
Fulton1462
Carroll1452
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Knox1310
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Washington1161
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Randolph1034
Clay975
Jay820
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Owen781
Sullivan761
Pulaski721
Brown701
Fountain632
Benton600
Blackford532
Ohio514
Pike460
Parke451
Switzerland430
Crawford420
Martin420
Vermillion380
Union320
Warren191
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Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 93963

Reported Deaths: 3539
CountyConfirmedDeaths
Franklin17254514
Cuyahoga12753477
Hamilton9160248
Lucas4944318
Montgomery405778
Summit3294217
Marion288444
Butler271459
Mahoning2411253
Pickaway235742
Stark1690132
Lorain163476
Warren163435
Columbiana158260
Trumbull1433103
Fairfield125425
Delaware120618
Licking112543
Clark108613
Lake104336
Wood92458
Clermont85511
Medina83533
Miami76937
Tuscarawas74713
Portage71760
Allen65442
Greene62611
Belmont58926
Richland54012
Ashtabula53945
Mercer53513
Geauga53143
Erie52427
Wayne49958
Ross4014
Huron3764
Ottawa35925
Athens3451
Madison33310
Sandusky33217
Holmes3226
Darke32127
Hancock3202
Auglaize2225
Lawrence2200
Union2161
Jefferson2063
Washington19722
Putnam19217
Scioto1881
Coshocton1866
Muskingum1811
Knox1692
Crawford1685
Preble1662
Seneca1613
Shelby1604
Morrow1582
Hardin15012
Clinton1486
Fulton1401
Champaign1381
Ashland1333
Highland1321
Defiance1294
Williams1243
Logan1231
Wyandot1207
Brown1121
Guernsey1117
Hocking1119
Carroll1085
Henry1061
Perry1062
Fayette970
Monroe9118
Van Wert691
Jackson670
Pike660
Paulding610
Gallia581
Adams532
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Harrison201
Morgan200
Noble170
Unassigned00
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