The Great Recession began in December 2007 and ended in June 2009, which makes it the longest recession since World War II. Beyond its duration, the Great Recession was notably severe in several respects. Real gross domestic product (GDP) fell 4.3 percent from its peak in 2007Q4 to its trough in 2009Q2, the largest decline in the postwar era (based on data as of October 2013). The unemployment rate, which was 5 percent in December 2007, rose to 9.5 percent in June 2009, and peaked at 10 percent in October 2009.
The financial effects of the Great Recession were similarly outsized: Home prices fell approximately 30 percent, on average, from their mid-2006 peak to mid-2009, while the S&P 500 index fell 57 percent from its October 2007 peak to its trough in March 2009. The net worth of US households and nonprofit organizations fell from a peak of approximately $69 trillion in 2007 to a trough of $55 trillion in 2009.
As the financial crisis and recession deepened, measures intended to revive economic growth were implemented on a global basis. The United States, like many other nations, enacted fiscal stimulus programs that used different combinations of government spending and tax cuts. These programs included the Economic Stimulus Act of 2008 and the American Recovery and Reinvestment Act of 2009.
About $12 billion of short-term agency debt was purchased starting in September 2008 to provide liquidity to markets.
Board of Governors of the Federal Reserve System. “Federal Reserve Issues FOMC Statement.” December 12, 2012, http://www.federalreserve.gov/newsevents/press/monetary/20121212a.htm.
Board of Governors of the Federal Reserve System. “FOMC Statement.” December 16, 2008, http://www.federalreserve.gov/newsevents/press/monetary/20081216b.htm.
Board of Governors of the Federal Reserve System. “FOMC Statement.” March 18, 2009a, http://www.federalreserve.gov/newsevents/press/monetary/20090318a.htm.
Board of Governors of the Federal Reserve System. “FOMC Statement.” November 4, 2009b, http://www.federalreserve.gov/newsevents/press/monetary/20091104a.htm.
Written as of November 22, 2013. See disclaimer.