This year, there have been murmurs that the United States is entering, again, into an economic recession. Although the National Bureau of Economic Research still has not release any formal announcement regarding this, American people are starting to experience an economic slowdown and a downturn in their financial and personal life.
This would not be the first time that the United States would experience an economic recession. According to economists, since 1854, the United States has encountered 32 cycles of expansions and contractions (boom and bust). There would be and average of 17 months of contraction an 38 months of expansion. However, since 1980 there have been only eight periods of negative economic growth over one quarter or more.
There were three period considered to recessions:
January- July 1980 and July 1981- November 1982: two years in total
July 1990- March 1991: eight months
November 2001- November 2002: twelve months
The longest record for an American economic boom was 37 quarters during 1991 until 2000.
The first economic recession happened in 1819. It greatly affected the new nation. After the War of 1812, the American economy was experiencing monetary strains. In 1814, during the term of President Madison, he allowed a replacement of a national bank. This enabled the post-war economy to boom. Although in 1817, there were some financial irregularities and irresponsibility. Americans started buying extravagant amounts of western lands- more than they can afford. The government started selling the land on credit.
On 1819, the government started to demand payment from the loans. During this time, the economy is starting to slow down. The market growth could no longer be sustained, the demands of American products are starting to wane. This led to a wave of bankruptcies and foreclosures. Land owners found themselves unable to pay their government debts and debts in the banks, leading to repossessing of lands.
After the 1817 recession, another recession in 1837 followed. With this recession, in just two months time, the economic decline accumulated to nearly $100,000,000 in value. There were reportedly 343 banks that closed (out of the 850 banks). While 62 banks reported partial failure.
There were recessions that happened in 1857, 1873, 1893 and 1907. The 1907 economic recession was a financial crisis. Nearly 50 percent of the stock market fell from its peak in 1906. It’s primary cause was a retraction of loans by some banks that began in New York City and soon spread into the whole country. The 1907 recession was the fourth recession in 34 years.
The post-World War I recession hit not only the United States but much of the countries globally. Pre-war economy was showing fast economic growth. As a matter of fact, the decade before the war, the world economy was growing record high. After the war, the global economy stated to decline. The sharpest or worst decline was during 1921. the recession was a result of the end of wartime production along with the return of the troops without any employment. Global production was also affected by the war, especially those countries whose industries were shattered by the war.
What followed was known as the Great Depression that occurred from 1929 until 1939. It is the most dramatic, worldwide economic landslide. It affected not only industrialized countries b out also nations who rely in exporting their raw materials. It was the largest and most important economic depression in the world.
Five recessions in the United States followed after the Great Depression. It was the recession during 1953, 1957, early in the 1980s, early during 1990s and early 2000.
The early 2000 economic recession was not felt only in the United States, but was experienced in most Western Countries. The European Union was mostly hit during 2000 and 2001. While the United states was affected mostly during 2002 and 2003.