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North America was one of the focal points of the global Great Recession. While Canada has managed to return its economy nearly to the levels it enjoyed prior to the recession, [1] the United States and Mexico are still under the influence of the worldwide economic slowdown. The cost of staple items dropped dramatically in the United States as a result of the recession.
The United States entered 2008 during a housing market correction, a subprime mortgage crisis and a declining dollar value. [2] In February, 63,000 jobs were lost, [3] a 5-year record. [4] In September, 159,000 jobs were lost, bringing the monthly average to 84,000 per month from January to September 2008. [5]
| Date | Discount rate change | New primary discount rate | New secondary discount rate | Fed funds rate change | New Fed funds rate |
|---|---|---|---|---|---|
| Apr 30, 2008 | -.25% | 2.25% | 2.75% | -.25% | 2.00% |
| Mar 18, 2008 | -.75% | 2.50% | 3.00% | -.75% | 2.25% |
| Mar 16, 2008 | -.25% | 3.25% | 3.75% | ||
| Jan 30, 2008 | -.50% | 3.50% | 4.00% | -.50% | 3.00% |
| Jan 22, 2008 | -.75% | 4.00% | 4.50% | -.75% | 3.50% |
Canada was one of the last industrialized nations to enter into a downturn. GDP growth was negative in Q1, but positive in Q2 and Q3 of 2008. The recession officially started in Q4. The almost 1-year delay of the start of the recession in Canada relative to the U.S. is largely explained by two factors. First, Canada has a strong banking sector [7] not weighed-down by the same degree of consumer-related debt issues that existed in the United States. [8] The United States economy collapsed from within, while the Canadian economy was being hurt by its trade relationship with the United States. Second, commodity prices continued to rise through to June 2008, supporting a key component of the Canadian economy and delaying the start of recession. In early December 2008, the Bank of Canada, in announcing that it was lowering its central bank interest rate to the lowest level since 1958, also declared that Canada's economy was entering in recession. [9] The Bank of Canada has since announced that it has two consecutive months of GDP decline (Oct -0.1% & Nov -0.7%). The country's unemployment rate could rise to 7.5% in the next two years, according to the latest OECD report. [10]
On July 23, 2009, the Bank of Canada officially declared the recession to be over in Canada. [11] However, the true economic recovery did not begin until November 30, 2009. [12] The Canadian economy would expand at an annualized rate of 6.1% in the first quarter (January–April) of 2010, surpassing analyst expectations and marking the best growth rate since 1999. [13] Economists had expected annualized GDP growth of 5.9% in the last quarter, up from 5% in last year's fourth quarter (September–December 2009). [13] The growth in the first quarter is the third straight quarter of economic expansion in Canada, coming on the heels of three consecutive quarters of contraction. [13] March growth came in at 0.6%, ahead of the 0.5% estimate. [13] 215,900 new jobs have been created in the winter and early spring months of 2010 alone - in the traditional period of time where the Canadian economy is at its most stagnant.
Canada was also in a recession during the first two quarters of 2015 average both a decline of 0.1 percent of GDP. [14]
Despite the solid financial system of Mexico, the effects of the financial crisis originated in the United States impacted Mexico's export sector by a significant amount considering that 85% of the country's exports go to the United States. [15] Reduced demand, the highest unemployment rate in almost a decade and the depreciation of the Mexican peso caused analysts to revise growth estimates officially from 1.8% to somewhere closer to 0% for 2008. [16] [17]
The recession did not show up until 2009, but the recession already slowed down in 2008. The country had a positive growth of 1.5% in 2008 compared to a 3.3% in 2007, by 2009 the economy had shrunk by 6.5%, a percentage bigger than that of the 1994-1995 crisis [18] and the largest in almost eight decades and registering an inflation of 3.57% [19]
Economic recovery from the historic downturn started in the late 2009 with exports rising 22.8 percent. [20] The economic prospects for 2010 in the early 2009 were of a positive growth of 3.5 [21] and some saw a steady recovery by the second quarter of 2010. [22] At the end of 2010, the OECD revealed an estimated growth of 4.5 percent [23] while the Mexican government estimated a growth of over 5 percent [24] and the creation of 730 thousand jobs. [25]
The estimated growth for 2011 range from 3.9 to 4.8. [26] Despite the sustained growth in 2010, it was not enough to cover up the loss of 2009.
As it mainly consists of commodity exporters, South America was not directly affected by the financial turmoil, even if the bond markets of Brazil, Argentina, Colombia and Venezuela have been hit. [27]
On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008. [28] Food prices have increased a lot, due to a lack of arable land. One of the main reasons for the loss of agricultural land was the high value offered by the production of biofuels. Food prices, rising since 2002, ascended from 2006, reaching a peak during the first quarter of 2008. In one year the average price of food rose by about 50%.
Then South American countries were affected by both the global slowdown and the decrease in food prices due to the declining demand. [29] In June 2008, the Economic Commission for Latin America and the Caribbean (ECLAC) declared it expected a 4% growth for 2009. However at the end of the year it predicted that the year 2009 would put an end to six years of prosperity during which Latin America has benefited from high raw materials prices. [30] Production in the region is likely to decline and unemployment to increase. [31] [32] However, the Center for Economic and Policy Research has estimated that the region may be able to cope with the global downturn with the right macro-economic policies, as these countries no longer depend on the U.S. economy. [33]
In economics, a recession is a business cycle contraction that occurs when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster.
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The economy of Spain is a highly developed social market economy. It is the world's 15th largest by nominal GDP and the sixth-largest in Europe. Spain is a member of the European Union and the eurozone, as well as the Organization for Economic Co-operation and Development and the World Trade Organization. In 2023, Spain was the 18th-largest exporter in the world. Meanwhile in 2022, Spain was the 15th-largest importer in the world. Spain is listed 27th in the United Nations Human Development Index and 36th in GDP per capita by the World Bank. Some main areas of economic activity are the automotive industry, medical technology, chemicals, shipbuilding, tourism and the textile industry. Among OECD members, Spain has a highly efficient and strong social security system, which comprises roughly 23% of GDP.
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An economic depression is a period of carried long-term economic downturn that is the result of lowered economic activity in one or more major national economies. Economic depression may be related to one specific country where there is some economic crisis that has worsened but most often reflexes historically the American Great Depression and similar economic status that may be recognized as existing at some country, several countries or even in many countries. It is often understood in economics that economic crisis and the following recession that may be named economic depression are part of economic cycles where the slowdown of the economy follows the economic growth and vice versa. It is a result of more severe economic problems or a downturn than the recession itself, which is a slowdown in economic activity over the course of the normal business cycle of growing economy.
The early 1990s recession describes the period of economic downturn affecting much of the Western world in the early 1990s. The impacts of the recession contributed in part to the 1992 U.S. presidential election victory of Bill Clinton over incumbent president George H. W. Bush. The recession also included the resignation of Canadian prime minister Brian Mulroney, the reduction of active companies by 15% and unemployment up to nearly 20% in Finland, civil disturbances in the United Kingdom and the growth of discount stores in the United States and beyond.
The early 1980s recession was a severe economic recession that affected much of the world between approximately the start of 1980 and 1982. It is widely considered to have been the most severe recession since World War II until the 2007–2008 financial crisis.
The Great Recession was a period of marked decline in economies around the world that occurred in the late 2000s. The scale and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.
A global recession is a recession that affects many countries around the world—that is, a period of global economic slowdown or declining economic output.
This article gives the timeline of the Great Recession, which hit many developed economies in the wake of the 2007–2008 financial crisis.
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In the United States, the Great Recession was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output. This slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis.
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The COVID-19 recession, also known as the Great Lockdown, was a global economic recession caused by COVID-19 lockdowns. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis. Within seven months, every advanced economy had fallen to recession.