How Long Do Recessions Last?

Now that US economy is officially in recession, the big question on everyone’s mind is, how long will it last?

So far, the current recession is the fourth longest in the past 80 years and its on track to be as long as recession in the 1970s and 80s, which lasted for 16 months. However we are still a long ways from the Great Depression, when the recession lasted for 43 months or more than 3.5 years.

In his speech on Monday, Bernanke said that it is not useful to compare the current recession with the Great Depression because that was much worse.

Here’s a fantastic graphic from the Wall Street Journal that indicates how long recessions have lasted:


Here’s a chart from Fidelity on how the stock market performs during recessions:

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2 Comments

  1. American people are currently being hit by recession. Even workers from other places are affected by it that is why President-elect Barack Obama is doing the best way he can to help the consumers and workers out of this trouble. His plan of cutting taxes to consumers would benefit not only the workers and consumers but also the businesses. He’s trying to get out a tax cut and a tax credit called the Make Work Pay credit. The future is impossible to tell – but it seems that the measures enacted by the current administration aren’t helping and the need for a payday loan is increasing. The mortgage collapse and subsequent credit crunch have slowed the economy to an almost stand still. However, economic measures usually take some time to start working, but it doesn’t take the sting out, in the meantime. Obama is hoping that bigger checks on payday will restore consumer confidence and you won’t need to take out a payday loan just to get by.

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  2. Yesterday, the president said, he feared a double dip recession. That means though the economy was showing signs of improvement( because of the bailout money and stimulous) that it could start slowly moving down hill again. Well, I know we all were hopeful, but the hard reality is maybe the government should have let Wall Street and the banking giants fail. As a US citizen, it does not make since to throw billions into saving failing companies and when we do this, it creates problems down the road. Example if the economy double dips, well are we not going to have to give billions more to each of these companies, that without the bailout in the first place, would have failed and gave way to new rising giants. This new rising of giants is the American way. Capitalism! That is what foundation America was built apon. But have we not learned that throwing money at these giants, that they will only expect another handout again in the future. With a billion dollars a new auto company could have been started. It makes know logical since.

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