Updated May 20, 2013
The history of recessions
in the United States since the Great Depression
show they are a natural, though painful, part of the business cycle
: On July 31, 2009 the Bureau of Economic Analysis BEA
revised all GDP
statistics from 1929. It has revised the most recent three years each year since then. The most recent stats (July 29, 2011) are given below, with the original stats in parentheses.
The worst recession since the Depression
. The economy shrank in five quarters, including four quarters in a row. Two quarters shrank more than 5%, and Q2 2008
shrank a whopping 8.9%, more than any other recession since the Great Depression. The recession ended in Q3 2009, when GDP turned positive, thanks to economic stimulus spending
. The recession was also the longest since the Depression, lasting 18 months.
- Q1 -1.8%(-.7%)
- Q2 1.3% (1.5%)
- Q3 -3.7% (-2.7%)
- Q4 -8.9% (-5.4%)
- Q1 -6.7% (-6.4%)
- Q2 -.7% (-.7%)
The recession was caused by the Subprime Mortgage Crisis, which then led to a global banking credit crisis
It lasted eight months (March-November 2001). It was caused by the Y2K scare, which created a boom and subsequent bust
in Internet businesses. It was aggravated by the 9/11 attack. The economy contracted in two quarters: Q1 -1.3% (-.5%) and Q3 -1.1% (-1.4%). Unemployment
reached 5.7% during the recession, but rose even further to 6% in June 2003. This often happens in recessions, as unemployment is a lagging indicator
. Most employers wait until they are sure the economy is back on its feet again before hiring permanent employees.
This recession was eight months (July 1990 to March 1991). It was caused by the Savings and Loan Crisis
in 1989. GDP was -3.5% (-3%) in Q4 1990 and -1.9% (-2%) in Q1 1991.
This was technically two recessions: the first six months of 1980 and 16 months from July 1981 - November 1982. It was partially caused by the Iranian oil embargo, which reduced U.S. oil supplies driving up prices. The Fed raised interest rates
to combat inflation
, reducing business spending. GDP was negative for six of the 12 quarters. The worst was Q2 1980 at -7.9%(-7.8%), the worst quarterly decline since the Great Depression (until the 2008-2009 recession). In Q1 1982, it was nearly as bad, plummeting 6.4%. Unemployment rose to 10.8% in November 1982, the highest level of unemployment in any recession. It was above 10% for 10 months.
This recession lasted sixteen months (November 1973-March 1975). OPEC
is blamed for quadrupling prices for a few months in 1973. It alone didn't cause such a deep recession. Several factors contributed. First, the U.S. went off of the gold standard
and printed more money. This created inflation, as too many dollars chased too few goods. Second, President Nixon instituted wage-price controls. This kept prices too high, reducing demand
. Wage controls made salaries too high, which forced businesses to lay off workers. The result was stagflation
and three consecutive quarters of negative GDP growth
Q3 -3.9% (-3.8%), Q4 -1.6% (-1.6%), 1975
Q1 -4.8%(-4.7%). Unemployment reached a peak of 9% in May 1975, two months after the recession technically ended.
This recession was relatively mild, lasting 11 months. GDP was down for two quarters:Q1 -.7%, Q2 .7%, Q3 3.6%, Q4 -4.2%. Unemployment peaked at 6.1% in December 1970.
Starting in April 1960, the recession lasted 10 months. GDP was -1.9% (-2%) in Q2 and -5% (-5.1%) in Q4. Unemployment reached a peak of 7.1% in May 1961.
Recession of 1957
It was eight months (August 1957-April 1958). GDP was - 4.2% in Q4 1957 then immediately plummeted 10.4% in Q1 1958. Unemployment didn't reach its peak of 7.1% until September 1958. It was caused by a contractionary monetary policy
Recession of 1953
Beginning July 1953, this recession lasted 10 months, a result of the end of the Korean War. Unemployment didn't reach its peak of 6.1% until September 1954, two months after the recession ended. GDP was down 6.2% in Q4 of 1953.
This 11 month recession began in November 1948 and lasted until October 1949, when unemployment reached a peak of 7.9%. GDP fell .5% for the year. This was another natural down cycle, caused by the economy adjusting to peace-time production.
This recession lasted only eight months, between February and October 1945. However, it seemed to last longer, since GDP plummeted 10.6% in 1946. This was a natural result of the demobilization from WWII, as the huge demand for military weapons were no longer needed. Government spending dropped, although business spending was robust. (Source: NBER, Business Cycle Expansions and Contractions
For annual statistics since 1929, see U.S. GDP Growth, U.S. GDP History, and U.S. Inflation Rate.