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Author: Admin | 2025-04-27
A recession denotes a significant, persistent, and widespread contraction in economic activity. The U.S. has suffered 14 official recessions since the Great Depression and other countries experience them as well, making clear such downturns are a recurring feature of the economic landscape. Since economies tend to grow most of the time, a recession and the economic hardships it inflicts are big news and a departure from the economy's usual expansionary mode. Recessions have grown increasingly infrequent over the past 40 years, possibly because policymakers have gained a better understanding of their causes. Between 1960 and 2007, 21 advanced economies were in recession 10% of the time, according to the International Monetary Fund.Key TakeawaysA recession is significant, persistent, and widespread contraction in economic activity.U.S. recessions have become shorter and less frequent in recent decades.Recessions are typically preceded by monetary and fiscal tightening, and often prompt a reversal of those policies.The COVID-19 recession was the shortest on record, while the Great Recession of 2007-2009 was the deepest since the downturn in 1937-1938. What's a Recession? Recessions are sometimes defined as two consecutive quarters of decline in real Gross Domestic Product (GDP), which measures the combined value of all the goods and services produced in an economy. In the U.S., the National Bureau of Economic Research (NBER) defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months." The NBER dates recessions based on indicators including GDP, payroll employment, personal income and spending, industrial production, and retail sales. Surveying Past U.S. Recessions Let's take a look at all official U.S. recessions since the Great Depression, focusing on common measurements of their severity as well as causes. Duration: How long did the recession last, according to NBER?GDP decline: How much did economic activity contract from its prior peak?Peak unemployment rate: What was the maximum proportion of the workforce left jobless?Reasons and causes: What unique historical circumstances contributed to the recession? Source: NBER. The Own Goal Recession: May 1937–June 1938 Duration: 13 monthsGDP decline: 10%Peak unemployment rate: 20%Reasons and causes: Expansionary monetary and
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