The Great Recession began in December of 2007 and ended in June of 2009. The trigger of the Great Recession was caused by financial panic causing the demand for consumption and new houses to collapse. A recession is a reduction in the amount of goods and services produced and sold. Usually a recession is a slow down in economic activity. The largest component of U.S. demand is household consumption. Since the American’s borrowed money it caused extreme debt. Americans were content to borrow more and more. This whirlwind of borrowers and lenders fed to each other’s desires that created a classic financial bubble
The housing bubble burst when interest rates rose and refinancing stalled, forced more homeowners to try to sell. Home prices began …show more content…
During the Great Recession households cut spending, shed outstanding debt, and increased their rate of personal savings in response to reductions in income, wealth, confidence, and credit access. American consumers played a prominent role in the global economy, accounting for just over 15 percent of world GDP in 2012.
GDP is the broadest quantitative measure of a nation's total economic activity. GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. Leading up to the 2007–2009 recession, consumer spending as a percentage of GDP had risen for 40 years, increasing from just over 61 percent in 1966 to below 70 percent in 2006. Even though consumer spending as a share of GDP rose several percentage points, the percentage of U.S. jobs supported by consumers fluctuated within a lower, narrow range.
The 1973 and 1981 recessions were also unusually long and deep, in terms of lost output. During the recession beginning in 1973, GDP fell by a cumulative 3%. During the recession beginning in 1981, GDP fell by a cumulative 2.9%, and this recession came on the heels of a 2.2% decline in GDP in a separate recession one year …show more content…
Compared to the previous recessions, the Great Recession has had the hardest impact on the U.S. As stated before the Great Recession began in December of 2007 and ended in June of 2009. The recession was caused by financial panic that caused the demand for consumption and new houses to collapse. The recession was initially mild, and the decline in GDP accelerated markedly after the financial downturn worsened. During the Great Recession households cut spending and shed outstanding debt. Overall the most common indicator of the recession was unemployment. With changes in employment it caused changes in GDP. Since ending in June 2009, GDP and the stock market have improved, but the social and economic effects of the recession continue to reverberate through the U.S. economy. Labor market data show that more than 14 million Americans remain unemployed with an unprecedented 6.3 million out of work longer than six months. (Russell Sage Foundation) Job growth is positive but sluggish, and at recent rates of growth, it could take a decade or longer to reestablish the prerecession unemployment rate of 5%. According to the CBO projections, real GDP will grow by 2.9 percent in 2015 and 2016, 2.5 percent in 2017, and 2.1 percent thereafter. If these projections are correct, potential GDP will never be
The housing bubble burst when interest rates rose and refinancing stalled, forced more homeowners to try to sell. Home prices began …show more content…
During the Great Recession households cut spending, shed outstanding debt, and increased their rate of personal savings in response to reductions in income, wealth, confidence, and credit access. American consumers played a prominent role in the global economy, accounting for just over 15 percent of world GDP in 2012.
GDP is the broadest quantitative measure of a nation's total economic activity. GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time. Leading up to the 2007–2009 recession, consumer spending as a percentage of GDP had risen for 40 years, increasing from just over 61 percent in 1966 to below 70 percent in 2006. Even though consumer spending as a share of GDP rose several percentage points, the percentage of U.S. jobs supported by consumers fluctuated within a lower, narrow range.
The 1973 and 1981 recessions were also unusually long and deep, in terms of lost output. During the recession beginning in 1973, GDP fell by a cumulative 3%. During the recession beginning in 1981, GDP fell by a cumulative 2.9%, and this recession came on the heels of a 2.2% decline in GDP in a separate recession one year …show more content…
Compared to the previous recessions, the Great Recession has had the hardest impact on the U.S. As stated before the Great Recession began in December of 2007 and ended in June of 2009. The recession was caused by financial panic that caused the demand for consumption and new houses to collapse. The recession was initially mild, and the decline in GDP accelerated markedly after the financial downturn worsened. During the Great Recession households cut spending and shed outstanding debt. Overall the most common indicator of the recession was unemployment. With changes in employment it caused changes in GDP. Since ending in June 2009, GDP and the stock market have improved, but the social and economic effects of the recession continue to reverberate through the U.S. economy. Labor market data show that more than 14 million Americans remain unemployed with an unprecedented 6.3 million out of work longer than six months. (Russell Sage Foundation) Job growth is positive but sluggish, and at recent rates of growth, it could take a decade or longer to reestablish the prerecession unemployment rate of 5%. According to the CBO projections, real GDP will grow by 2.9 percent in 2015 and 2016, 2.5 percent in 2017, and 2.1 percent thereafter. If these projections are correct, potential GDP will never be