The recent economic downturn is the only market cycle to plummet to new lows since the Great Depression, the Federal Reserve Bank of Dallas said in a report.
The 2007-2009 recession lasted 18 months. During that time, the nation’s economic output contracted 5.1% between December 2007 and June 2009.
In the wake of World War II, the U.S. has traveled through 10 recessions, all of which lasted 10.4 months on average. Economic output during those previous recessions contracted approximately 1.8% on average from peak to trough.
Thomas Siems, author of a Dallas Fed Bank report entitled “Barring the Great Recession,” claims all of this data from the National Bureau of Economic Research supports the claim that the 2008 recession was the worst downturn since the Great Depression with no other comparables found in the previous 10 recessions.
The job loss rate following the 2008 recession reached 6.3%, compared to the average 2.7% rate recorded in recessions studied between 1953 and 1982. The 1991 and 2001 recessions experienced slower job recoveries compared to older recessions, but still rebounded much faster when compared to the post-2009 recovery.
“The annualized rate of growth over the nine quarters since the economy hit bottom in June 2009 has been 2.4%,” said Siems. “For post-WWII recoveries, annualized growth averaged 5.2% over the subsequent nine quarters; for the three previous recoveries, annualized growth averaged 4% over the same period.”
Siems’ report collaborates the fears of investors who watched the stock market riled by weak job gains in April. The modest 69,000 jobs added iast month is far below gains of 200,000-plus positions earlier this year. Siems claims that four years after the recession, U.S. employment is still 3.7% below pre-recession levels and it could take another two to three years before a full recovery takes effect.
“Job losses during the Great Recession were also the most dreadful since the Great Depression. And, for the nation as a whole, job growth has been muted during the recovery,” Siems said.