Great Depression Onward
Following the end of World War II and the large adjustment as the economy adjusted from wartime to peacetime in 1945, the collection of many economic indicators, such as unemployment and GDP, became standardized. Recessions after World War II may be compared to each other much more easily than previous recessions because of these available data. The listed dates and durations are from the official chronology of the National Bureau of Economic Research. GDP data are from the Bureau of Economic Analysis, unemployment from the Bureau of Labor Statistics (after 1948). Note that the unemployment rate often reaches a peak associated with a recession after the recession has officially ended.
No recession of the post-World War II era has come anywhere near the depth of the Great Depression. In the Great Depression, GDP fell by 27% (the deepest after demobilization is the recession beginning in December 2007, during which GDP has fallen 3.9% as of the second quarter of 2009) and unemployment reached 25% (the highest since was the 10.8% rate reached during the 1981–82 recession).
The National Bureau of Economic Research dates recessions on a monthly basis back to 1854; according to their chronology, from 1854 to 1919, there were 16 cycles. The average recession lasted 22 months, and the average expansion 27. From 1919 to 1945, there were six cycles; recessions lasted an average 18 months and expansions for 35. From 1945 to 2001, and 10 cycles, recessions lasted an average 10 months and expansions an average of 57 months. This has prompted some economists to declare that the business cycle has become less severe. Factors that may have contributed to this moderation include the creation of a central bank and lender of last resort, like the Federal Reserve System in 1913, the establishment of deposit insurance in the form of the Federal Deposit Insurance Corporation in 1933, increased regulation of the banking sector, the adoption of interventionist Keynesian economics, and the increase in automatic stabilizers in the form of government programs (unemployment insurance, social security, and later Medicare and Medicaid). See Post-World War II economic expansion for further discussion.
| Name | Dates | Duration (months) | Time since previous recession (months) | Peak unemployment | GDP decline (peak to trough) | Characteristics |
|---|---|---|---|---|---|---|
| Great Depression | 1929Aug 1929 – Mar 1933 |
433 years 7 months |
0211 year 9 months |
24.924.9% (1933) |
26.7−26.7% | Stock markets crashed worldwide. A banking collapse took place in the United States. Extensive new tariffs and other factors contributed to an extremely deep depression. The United States did remain in a depression until World War II. In 1936, unemployment fell to 16.9%, but later returned to 19% in 1938 (near 1933 levels). |
| Recession of 1937–1938 | 1937May 1937 – June 1938 |
131 year 1 month |
0504 years 2 months |
19.019.0% (1938) |
03.4−18.2% | The Recession of 1937 is only considered minor when compared to the Great Depression, but is otherwise among the worst recessions of the 20th century. Three explanations are offered for the recession: that tight fiscal policy from an attempt to balance the budget after the expansion of the New Deal caused recession, that tight monetary policy from the Federal Reserve caused the recession, or that declining profits for businesses led to a reduction in investment. |
| Recession of 1945 | 1945Feb–Oct 1945 | 088 months | 0806 years 8 months |
05.25.2% (1946) |
12.7−12.7% | The decline in government spending at the end of World War II led to an enormous drop in gross domestic product, making this technically a recession. This was the result of demobilization and the shift from a wartime to peacetime economy. The post-war years were unusual in a number of ways (unemployment was never high) and this era may be considered a "sui generis end-of-the-war recession". |
| Recession of 1949 | 1948Nov 1948 – Oct 1949 |
1111 months | 0373 years 1 month |
07.97.9% (Oct 1949) |
01.7−1.7% | The 1948 recession was a brief economic downturn; forecasters of the time expected much worse, perhaps influenced by the poor economy in their recent lifetimes. The recession began shortly after President Truman's "Fair Deal" economic reforms. The recession also followed a period of monetary tightening. |
| Recession of 1953 | 1953July 1953 – May 1954 |
1010 months | 0453 years 9 months |
06.16.1% (Sep 1954) |
02.6−2.6% | After a post-Korean War inflationary period, more funds were transferred to national security. In 1951, the Federal Reserve reasserted its independence from the U.S. Treasury and in 1952, the Federal Reserve changed monetary policy to be more restrictive because of fears of further inflation or of a bubble forming. |
| Recession of 1958 | 1957Aug 1957 – April 1958 |
088 months | 0393 years 3 months |
07.57.5% (July 1958) |
03.1−3.7% | Monetary policy was tightened during the two years preceding 1957, followed by an easing of policy at the end of 1957. The budget balance resulted in a change in budget surplus of 0.8% of GDP in 1957 to a budget deficit of 0.6% of GDP in 1958, and then to 2.6% of GDP in 1959. |
| Recession of 1960–61 | 1960Apr 1960 – Feb 1961 |
1010 months | 0242 years | 07.17.1% (May 1961) |
01.6−1.6% | Another primarily monetary recession occurred after the Federal Reserve began raising interest rates in 1959. The government switched from deficit (or 2.6% in 1959) to surplus (of 0.1% in 1960). When the economy emerged from this short recession, it began the second-longest period of growth in NBER history. |
| Recession of 1969–70 | 1969Dec 1969 – Nov 1970 |
1111 months | 1068 years 10 months |
06.1 6.1% (Dec 1970) |
00.6−0.6% | The relatively mild 1969 recession followed a lengthy expansion. At the end of the expansion, inflation was rising, possibly a result of increased deficits. This relatively mild recession coincided with an attempt to start closing the budget deficits of the Vietnam War (fiscal tightening) and the Federal Reserve raising interest rates (monetary tightening). |
| 1973–75 recession | 1973Nov 1973 – Mar 1975 |
161 year 4 months |
0363 years | 09.0 9.0% (May 1975) |
03.2−3.2% | A quadrupling of oil prices by OPEC coupled with high government spending because of the Vietnam War led to stagflation in the United States. The period was also marked by the 1973 oil crisis and the 1973–1974 stock market crash. The period is remarkable for rising unemployment coinciding with rising inflation. |
| 1980 recession | 1980Jan–July 1980 | 066 months | 0584 years 10 months |
07.8 7.8% (July 1980) |
02.2−2.2% | The NBER considers a short recession to have occurred in 1980, followed by a short period of growth and then a deep recession. Unemployment remained relatively elevated in between recessions. The recession began as the Federal Reserve, under Paul Volcker, raised interest rates dramatically to fight the inflation of the 1970s. The early '80s are sometimes referred to as a "double-dip" or "W-shaped" recession. |
| Early 1980s recession | 1981July 1981 – Nov 1982 |
161 year 4 months |
0121 year | 10.8 10.8% (Nov 1982) |
02.7−2.7% | The Iranian Revolution sharply increased the price of oil around the world in 1979, causing the 1979 energy crisis. This was caused by the new regime in power in Iran, which exported oil at inconsistent intervals and at a lower volume, forcing prices up. Tight monetary policy in the United States to control inflation led to another recession. The changes were made largely because of inflation carried over from the previous decade because of the 1973 oil crisis and the 1979 energy crisis. |
| Early 1990s recession | 1990July 1990 – Mar 1991 |
088 months | 0927 years 8 months |
07.8 7.8% (June 1992) |
01.4−1.4% | After the lengthy peacetime expansion of the 1980s, inflation began to increase and the Federal Reserve responded by raising interest rates from 1986 to 1989. This weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s, and growing consumer pessimism combined with the weakened economy to produce a brief recession. |
| Early 2000s recession | 2001March 2001–Nov 2001 | 088 months | 12010 years | 06.3 6.3% (June 2003) |
00.3−0.3% | The 1990s were the longest period of growth in American history. The collapse of the speculative dot-com bubble, a fall in business outlays and investments, and the September 11th attacks, brought the decade of growth to an end. Despite these major shocks, the recession was brief and shallow. Without the September 11th attacks, the economy might have avoided recession altogether. |
| Late-2000s recession | 2007Dec 2007 – June 2009 | 181 year 6 months |
0736 years 1 month |
09.710.0% (October 2009) |
03.9−5.1% | The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing-related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States' largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date. |
Read more about this topic: List Of Recessions In The United States
Famous quotes containing the words depression and/or onward:
“That terrible mood of depression of whether it’s any good or not is what is known as The Artist’s Reward.”
—Ernest Hemingway (1899–1961)
“No man ever came to an experience which was satiating, but his good is tidings of a better. Onward and onward!”
—Ralph Waldo Emerson (1803–1882)