I’m going to start a series on lessons learned from past recessions that will hopefully introduce you to what to expect in a recession and how it might impact your company. This week, I’m starting with a list and brief history of recessions in the United States starting with the Great Depression. The list below comes from Wikipedia. For more information, please see - http://en.wikipedia.org/wiki/List_of_recessions
I am thinking that an understanding of the past will give us some context to view our current economy.
Great Depression – 1929-39, 10 Years
Stock markets crashed worldwide, and a banking collapse took place in the United States. This sparked a global downturn, including a second, more minor recession in the United States, the Recession of 1937.
my note: during the Great Depressions, unemployment reached 25.7%. A full quarter of those that were eligible to be employed could not find jobs. If you are reading articles or listening to politicians who are comparing our current recession, please use caution. While our current unemployment rate of 7.4% is bad and people are hurting, it would take a 50% increase in that number to reach 11%....which is still not half of the Great Depression.
Recession of 1953 – 1953-54, 1 year
After a post-Korean War inflationary period, more funds were transferred into national security. The Federal Reserve changed monetary policy to be more restrictive in 1952 due to fears of further inflation.
Recession of 1957 – 1957-58, 1 Year
Monetary policy was tightened during the two years preceding 1957, followed by an easing of policy at the end of 1957. The budget balanced resulted in a 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, 1960-61, 1 year
After President Kennedy’s January 1961 call for increased government spending to improve the Gross National Product and to reduce unemployment, the 1960 recession ended in February.
1973 Oil Crisis, 1973-75, 2 Years
A quadrupling of oil prices by OPEC coupled with high government spending due to the Vietnam War led to stagflation in the United States.
Early 1980’s Recession, 1980-82, 2 Years
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 to go up. Tight monetary policy in the United States to control inflation led to another recession. The changes were made largely because of inflation that was carried over from the previous decade due to the 1973 oil crisis and the 1979 energy crisis.
my note: I am seeing most economists and authors compare our current recession to the economy that Reagan inherited which was lengthened by the tight fiscal policy of his government.
Early 1990’s Recession, 1990-91, 1 Year
Industrial product and manufacturing-trade sales decreased in early 1991.
Early 2000’s Recession, 2001-03, 2 years
The collapse of the dot-com bubble, the September 11th attacks, and the accounting scandals contributed to a relatively mild contraction in the North American economy.
Late 2000’s Recession, 2007-Present, ongoing
The collapse of the housing market led to bank collapses in the US and Europe, causing the amount of available credit be sharply curtailed.
Looking at the dates and lengths, we are experiencing a significant downturn about every decade and the length of each (outside of the Great Depression) is 1 t o2 years.