|← The Financial Reform||Profits and Revenues →|
The most obvious and memorable moments of American recession stretches back to the year 1900 since which a total twenty two recessions have occurred. In light of the recent recession which persisted for years, it should be observed by facts that despite the positive results in the stock market, there was no sign of positive recovery in the economy in general. Statistical measures of employment, housing and other economic variables remained negative for good part of the turmoil.
It is true that the most recent recession in America took longer time to recover compared to average recession periods. This recession took approximately four years and seven months, which by comparison only matches that of the Great Depression of 1929-1933. Since the period of Great Depression, the average length of subsequent recessions has been approximately one year. For instance, three most recent recessions prior to this recession happened for one year and four months, eight and eight months consecutively. Therefore, there is substantial evidence to prove that the current recession has by far exceeded the normal recession periods.
There is also evidence to show that the most recent recession was deeper than the average recession as measured by the decline in real GDP. The worst GDP fall in American history occurred during the great depression when it slumped by -26.7%. The GDP fall during the recent recession slumped by -5.1% compared to -0.3%, -1.4%, and -2.7% in the three most preceding recessions respectively. It is logical therefore to deduce that the recent recession was the second worst recession in the history of American economy.
Another substantial claim is out of the fact that the road to recovery in the last recession was shaky and weak in comparison to the past recoveries. American economy began to adjust and recover from its woes in the mid-2009. From this period through 2010, the real GDP increased at 3.0% annual rating. However, from statistics, things changed in the year 2011 when the GDP increment stood at 1.6% and only to recover marginally to 2.2% in 2012. It should be remembered that in comparison to the previous recoveries, a 3% GDP growth is weaker and as such more work needs to be done.