The U.S. economy always tumbled into a recession every decade since the period immediately before the Civil War.
But there is a high probability of defying that trend for the first time in 170 years.
Economists told Insider that people continuously look for work and that there is prolonged recovery.
Since the Civil War, the U.S. once in ten years always tumbles into a recession.
The last one prolonged from December 2007 until June 2009. There were 18 months of historical rates of home foreclosures and job losses. The rise of populist and authoritarian leaders around the world happened because of the severe downturn of the global financial crisis, as some experts claim.
For the first time in 170 years, the United States economy is most likely to defy that trend in 2020. The first decade which has come and gone without a recession is the 2010s. It is commonly defined as two consecutive quarters of contracting gross domestic product.
2020 will be an extraordinary period for the U.S. economy – one that recovered from the depths of the Great Recession and secured in a recording interval of sustained growth. Barack Obama steered an economy on the verge of collapse and helped to put it back on track. Then, President Trump continued to work on recovery.
An assistant professor of economics at the University of Pennsylvania, Dr. Ioana Marinescu, said that a big reason the U.S. escaped a recession is that the index of the economy was so low. Thus, the only option the economy had was to grow.
Since the 1930s The 2010s recovery followed the worse recession. So, without any adverse effects, there was room to grow for the economy.
Effects from the Last Recession
But the impact of the last recession can still felt today. For example, in the form of worsened career prospects for millennials and other young adults, and accelerating wealth inequality.
An associate professor of economics at George Washington University, Tara Sinclair, told Business Insider that the U.S. had a terrible recession but prolonged recovery. She says that during the last three recession, the U.S. has not seen a boom period.
Sinclair adds that with plodding steps, the U.S. is reaching the historic levels of unemployment. After the previous recession, generations experienced higher real wage gains than nowadays age.
These employment data suggest that there are people who still need jobs. The blockbuster November jobs report shows that the economy beat expectations and added 266,000 new jobs.
The visiting scholar at the conservative American Enterprise Institute and a professor of economics at Harvard University, Dr. Robert Barro, noted the lousy situation of unemployment problem in the United States.
Barro told Business Insider in an email that real GDP is remarkably stable, although at a low average rate, and that is why there has been no recession. Stead performance is averaging out to 2% since 2010.
The trade war hampered the economy. The significant factor of the economies slow recovery is the trade war between the United States and China. Nevertheless, there is no evidence that economists can predict the start of the recession.