A recession is a period marked by a decline in the overall economic activity. Generally, a country is said to be facing a recession if its gross domestic product (GDP) drops for two consecutive quarters. A recession could last for a few months or a few years. The longer it lasts, the more problems it creates, both economically and socially. Over the years, the U.S. has seen several recessions of varying lengths. Detailed below are the ten longest recessions ever.
Ten Longest Recessions Ever
Our list of the ten longest recessions ever is based on the number of months a downturn has lasted. For the list, we have used data from an Investopedia article. Following are the ten longest recessions ever:
Historically, the Chinese market has been relatively isolated from international investors, but much is changing there now, making China virtually impossible for the diversified investor to ignore. Earlier this year, CNBC pointed to signs that Chinese regulators may start easing up on their scrutiny of companies after months of clamping down on tech firms. That Read More
The Union (8 months)
This recession started from February 1945 and continued until October 1945. The peak unemployment rate during the period was 5.2%, while the GDP rate dropped by 10.9%. This period (after World War II) was marked by the demobilization of the military and slow transition to civilian production. Also, veterans were starting to re-enter the workforce, pushing the unemployment rate up. This downturn was called the "Union Recession" because unions were starting to exert pressure, resulting in a rise in the minimum wage.
The "Rolling Adjustment" Recession (10 months)
This recession started in April 1960 and continued until February 1961. During this period, the peak unemployment rate was 6.9%, while the GDP rate dropped by 1.6%. The automotive industry was one of the worst hit sectors during this downturn. To spur a rebound, President John F. Kennedy came up with stimulus spending, including tax cuts, as well as expanding unemployment and Social Security benefits.
The Post-Korean War (10 months)
This recession started in July 1953 and continued until May 1954. The peak unemployment rate during this downturn was 5.9%, while GDP dropped by 2.7%. This recession was primarily the result of a tightened monetary policy after the Korean War. However, rising interest rates hurt consumer confidence, resulting in reduced demand. The Fed then eased policies in 1954.
Nixon Era (11 months)
This recession was from December 1969 to November 1970. The peak unemployment rate during the downturn was 5.9%, while the GDP dropped by 0.6%. To control the rising inflation by the end of the decade, the Federal Reserve resorted to a tight monetary policy and raised rates. Also, the Nixon Administration moved to cut government spending. After a rise in unemployment, the Fed started to ease its monetary policies.
The Post-War Recession (11 months)
This downturn started in November 1948 and lasted until October 1949. The peak unemployment rate during the period was 5.7%, while GDP dropped by about 1.7%. After the war, the returning veterans started entering the workforce, and this resulted in the rise in unemployment at the time. Also, the government at the time, didn’t pay much attention to rising unemployment as it was more worried about inflation.
The Roosevelt Recession (13 months)
This recession started in May 1937 and lasted until June 1938. The peak unemployment rate was 20% during the recession, while the GDP rate dropped by 10%. President Franklin D. Roosevelt slashed government spending in 1937 even though the economy hadn’t recovered fully from the Great Depression, and this lead to a downturn. To put the economy back on the recovery path, Roosevelt signed a $3.75 billion spending bill.
Covid-19 Recession (Ongoing)
Though the ongoing recession isn’t the fourth longest yet, we believe by the time it ends, it will exceed the duration of the next longest. This downturn is the result of the coronavirus pandemic, which engulfed the global markets last year. To combat the virus, governments around the world enforced lockdown and social distancing measures, resulting in the drop in economic activities. The U.S. saw a peak unemployment rate of 13% in May last year due to the pandemic.
The Iran/Energy Crisis Recession (16 months)
This recession started in July 1981 and lasted until November 1982. The peak unemployment rate during the period was 10.8%, while GDP dropped by 2.9%. This downturn was primarily the result of a regime change in Iran. Following the regime change, the world's fourth-largest producer of oil at the time used the oil supply to push the prices up. This resulted in rampant inflation in the U.S. and thus, the government was forced to use a tighter monetary policy.
The Oil Crisis (16 months)
This recession started in November 1973 and lasted until March 1975. During the period, the GDP dropped by 3%, while the peak unemployment rate registered during this downturn was 8.6%. Two major reasons triggering the recession were quadrupling of oil prices and massive government spending on the Vietnam War.
The Great Recession (18 months)
This recession started from December 2007 and continued until June 2009. The peak unemployment rate during this recession was 10%, while GDP witnessed a 4.3% drop. The collapse of the housing market triggered this recession. Following the downturn, the financial markets worldwide saw a sharp drop. The oil prices saw a roller-coaster ride during the period, rising to record highs by mid-2008 and then crashing.