Downturn longest since Great Depression

Financial Times:

The longest US recession since the Great Depression officially ended in June 2009, the body charged with dating US business cycles said on Monday.

The National Bureau of Economic Research said that the recession lasted 18 months, from December 2007 to June 2009. That was longer than the 16 months of the 1973-75 and 1981-82 recessions.

The announcement highlights the extraordinary length of the recession that began when the collapse of the subprime mortgage market triggered the most severe financial crisis since 1929.

An official end date for the recession also makes it official that the recovery since 2009 has been unusually weak and jobless. That gives evidence to those who argued that recovery from a recession caused by a financial crisis would be slow and painful as households struggle to pay down their debts.

Output is up by only 3 per cent after four quarters of recovery compared with 7.7 per cent after the 1982 recession and 6.2 per cent after the recession that ended in 1975.