Comparing Last Two US Recessions

Key Statistics for the Last Two Recessions

Leading into the 2001 recession, the US dollar was very strong. Commodity prices had suffered a multi-year deflation and CPI inflation was falling to very low levels. Is this helps to refresh some recent memories?

In sharp contrast, the 1990-914 recession came preceded by a relatively weak US dollar and rising inflation.

In terms of government policies, the two recessions were almost opposites. The government cut tax rates during and following the 2001 recession, whereas it raised rates substantially in 1990, partly can be explained that the recession started just two months after the presidential term began and ended 36 months before the next presidential election. The Fed only cut rate in January 2001, months before the official beginning of the recession.

In contrast, the 1990-91 recession occurred in the second-half of the presidential term and ended 20 months before the November 1992 election.

Weakness in business investment spending was clearly the prominent factor behind the 2001 recession, while weak consumption spending and residential investment played their usual important roles in the 1990-91 recession.

It would not be too surprising if I think that the 2001 recession will be a less important factor than the 1990-91 recession in the context of our current predicaments.

Key Statistics for the Last Two Recessions