Recession of 2008
The Recession of 2008 is a major worldwide economic downturn that was caused by the Financial Crisis of 2008. It began in the financial sector as major banks in the U.S. and Europe were in serious trouble, and spread to the automobile industry, where General Motors and Chrysler verged on bankruptcy in December.
Retail sales in the U.S. and worldwide are in a major slump, with the slowest Christmas shopping season in decades.
American manufacturing contracted in November 2008 at the steepest rate in 26 years. Factory indexes in China, the U.K., euro area, and Russia all fell to record lows.
Oil, metal and food prices, after hitting record levels in the summer of 2008, have plunged. Oil went from $145 a barrel to $42.
The longest economic slumps since 1945 were the 16-month downturns that ended in March 1975 and November 1982. The Great Depression lasted 43 months, from August 1929 to March 1933.
"This may be referred to as the Great Recession," because of its length, said Norbert Ore, chairman of the Institute for Supply Management’s factory survey. "It looked like we were headed for a shallow recession earlier in the year because of higher energy prices. With the meltdown in the financial sector, it has become something more serious."
After reaching a low of 4.1% in October, 2006, the U.S. unemployment rate has been trending upward. Analysts from the National Bureau of Economic research say that the current nation-wide recession began a full year ago; the economy peaked in December, 2007. This recession is expected to continue into 2010. Unemployment reached 6.5% in November 2008 and could reach 9% or even higher in 2009. Unemployment has already reached 8% and higher in some industrial areas of the U.S. and the West Coast.
The unemployment rate nationally in November 2008 was 6.5%, shown in chart below in dark blue. Michigan had the highest unemployment at over 9%. In the West, California, Oregon, and Nevada all had relatively high unemployment levels, all around 8%.