The latest U.S. business cycle expansion ended in February of 2020. This expansionary period was particularly noteworthy because it reached a new record length, 128 months from its June 2009 trough to the recent peak.1 Before the next expansionary cycle begins, the economy must first bottom out; when this will occur is a guessing game for economists at this point with so many uncertainties abound.
Using data from the National Bureau of Economic Research (NBER), I created the chart below that showcases U.S. business cycle expansion and contraction throughout recent history. Note that there is not a newly asserted trough date yet, this date will become clear in hindsight as activity normalizes and the economy returns to growth. Looking back at prior business cycle contractions could yield insight for predicting the eventual turnaround in economic activity. The last contractionary period was the financial crisis of 2007-2008 which saw a trough after 18 months of contraction. Even more encouraging, the dot-com bubble troughed a mere 8 months after its peak. A similar quick turnaround would be very welcomed, however, looking further back in time at The Great Depression shows a recessionary period that lasted 43 months, not quite as rosy of a picture.1