I wanted to know how long each recession/depression lasted in the U.S., which started in the 1900’s. There have been 21 periods of contraction in our economy, the first starting in 1902. All together they averaged 14.4 months in length. The longest downturn was 43 months (August 1929 to March 1933) and the shortest was 6 months (January 1980 to July 1980)
Every contraction is different in length and cause but the one thing that they all have in common is that they all ENDED. In fact, the recovery/expansion lasted an average of 43.2 months. That is 3 times as long as the recessions.
With all the layoffs and poor economic data coming out everyday it is natural to think it will never get better. We will recover, but the problem is no one knows exactly when and there will not be one thing that causes it to happen. Little positives will start to show up, like increased home purchases (already happening), consumer sentiment goes up, etc. Do not use the unemployment rate because history has shown the stock market starts to move up long before the unemployment goes up.
Invest your money in the stock market now so you won’t miss out on the growth.
Recession Data from http://www.nber.org/cycles.html
As an aside: I have been reading the book “FDR’s Folly” where Jim Powell looks back at the policies of the New Deal and how they prolonged the depression. I just started reading it because I think there are many similarities to what the government did during the Great Depression and what Obama is doing now. I will share some thoughts on the book after I am finished.
