The History of Recessions in the United States

Causes, Length, GDP, and Unemployment Rates

Homelessness On The Rise In New York City
Unemployment and homelessness rise during a recession. Spencer Platt/Getty Images News/Getty Images

The history of recessions in the United States since the Great Depression show they are a natural, though painful, part of the business cycle. The National Bureau of Economic Research defines when a recession starts. The Bureau of Economic Analysis measures recessions using gross domestic product.

1945 Recession

This recession lasted only eight months (February to October 1945). It seemed to last longer.

That's because GDP continued to fall until it reached -10.6 percent 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

1949 Recession

This 11-month recession began in November 1948 and lasted until October 1949, when unemployment reached a peak of 7.9 percent.  It was a mild adjustment as the economy continued adjusting to peace-time production. 

GDP GrowthQ1 (Jan-Mar)Q2 (Apr-Jun)Q3 (Jul-Sep)Q4 (Oct-Dec)
1949-5.4%-1.3%+4.5%-3.5%

Recession of 1953

This recession lasted ten months (July 1953 - May 1954). It resulted from the demobilization after the Korean War. Unemployment didn't reach its peak of 6.1 percent until September 1954, four months after the recession ended. GDP contracted 2.2 percent in Q3, 5.9 percent in Q4, and 1.8 percent in Q1 1954.

Recession of 1957

It lasted eight months (August 1957-April 1958). GDP fell 4.0 percent in Q4 1957. It immediately plummeted 10.0 percent in Q1 1958. Unemployment didn't reach its peak of 7.1 percent until September 1958. The Fed's contractionary monetary policy caused it.

1960 Recession

Starting in April 1960, the recession lasted 10 months, until February 1961.

GDP was -1.5 percent in Q2, rose 1.0 percent in Q3, but was -4.8 percent in Q4. Unemployment reached a peak of 7.1 percent in May 1961. President Kennedy ended the recession with stimulus spending. His opponent, Richard Nixon, said the recession cost him the election. That's because he had been Vice-President so voters blamed the Republicans for causing it.

1970 Recession

This recession was relatively mild, lasting 11 months (December 1969 - November 1970.) GDP was -0.7 percent in Q1, then rose 0.7 percent in Q2, 3.6 percent in Q3, and fell 4.0 percent in Q4. Unemployment peaked at 6.1 percent in December 1970.

1973-1975 Recession

This recession lasted sixteen months (November 1973-March 1975). OPEC is blamed for quadrupling oil prices, but the OPEC oil embargo alone didn't cause such a deep recession. Several factors contributed.

First, 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.

Second, Nixon took the U.S. off of the gold standard in response to a run on the gold held at Fort Knox. That created inflation, as the price of gold skyrocketed to $120 an ounce and the dollar's value plummeted.

The result was stagflation and five quarters of negative GDP growth1973 Q3 -2.2 percent, 1974 Q1 -3.3 percent, Q3 -3.8 percent, Q4 -1.6 percent, 1975 Q1 -4.7 percent. Unemployment reached a peak of 9 percent in May 1975, two months after the recession technically ended.

1980-1982 Recession

This was technically two recessions: the first six months of 1980 (January - July) and 16 months from July 1981 - November 1982.

The Fed caused it by raising interest rates to combat inflation. That reduced business spending. The Iranian oil embargo aggravated it by reducing U.S. oil supplies. That constrained supply and drove up prices.

GDP was negative for six of the 12 quarters. The worst was Q2 1980 at -7.9 percent, the worst quarterly decline since the Great Depression (until the 2008-2009 recession).

Unemployment rose to 10.8 percent in November 1982, the highest level of unemployment in any recession. It was above 10 percent for 10 months. President Reagan ended it by lowering the tax rate and boosting the defense budget.

GDP GrowthQ1Q2Q3Q4
19801.3%-7.9%-0.6%7.6%
19818.5%-2.9%4.7%-4.6%
1982-6.5%2.2%-1.4% 0.4%

1990-1991 Recession

This recession was eight months (July 1990 to March 1991). The 1989 Savings and Loan Crisis caused it. GDP was -3.4 percent in Q4 1990 and -1.9 percent in Q1 1991.

2001 Recession

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 -1.1 percent (-0.5 percent) and Q3 -1.3 percent (-1.4 percent). Unemployment reached 5.7 percent during the recession, but rose even further to 6 percent 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.

2008-2009 Recession

The Great Recession was the worst since the 1929 Depression. It was also the longest since the Depression, lasting 18 months (December 2007 - June 2009). The Subprime Mortgage Crisis was the trigger. That created a global banking bank credit crisis.

The economy shrank in five quarters, including four quarters in a row. Two quarters contracted more than 5 percent, including Q4 2008 which fell a whopping 8.2 percent, more than any other recession since the Great Depression. The recession ended in Q3 2009, when GDP turned positive, thanks to the economic stimulus package.

The Bureau of Economic Analysis revises its GDP estimates as it gets new data. It often recalibrates its estimates in June of each year. Here's the final estimate (made in June 2016) followed by the initial estimate (made one month after the quarter ended). This helps shows how difficult it is to correct a recession until it's already started. It also reminds you how difficult it is to time the market with your investments.

2008

  • Q1 The economy shrank 2.7%. Initially, the BEA thought it grew 0.6%.
  • Q2 The economy rebounded 2.0% The initial release said it grew 1.9%. Everyone thought the Fed's rescue of Bear Stearns ended the threat to financial markets.
  • Q3 The economy shrank 1.9%, much more than -0.3% initial estimate.
  • Q4 The economy collapsed, shrinking 8.2%. The BEA initially said it only shrank 3.8%, although that was bad enough. For more details on all the revisions, see 2008 GDP.

2009

  • Q1 The economy shrank 5.4%. The initial estimate said it shrank 6.1%.
  • Q2 GDP growth was -0.5%, better than the initial estimate of -1.0%. See 2009 GDP.

For annual statistics since 1929, see U.S. GDP Growth, U.S. GDP History, and U.S. Inflation Rate.