How This Downturn Stacks Up

October 27, 2008: DataCenter This Week

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Economy watchers draw stark comparisons between this downturn and the deep recessions of 1980-82 and 1973-75. Sens. John McCain and Barack Obama this month both labeled it "the worst financial crisis since the Great Depression."
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See here for more related data: Layoff Report: Highest Since 9/11

So how does this downturn really compare? Gross domestic product slipped in the fourth quarter of 2007 and rose in the first two quarters of this year. Third-quarter GDP, out Oct. 30, is expected to be dismal. Still, we haven't (yet) endured the consecutive quarters of decline seen in major downturns of the past.

Total employment has dropped every month this year, but the national unemployment rate (6.1%) remains far below the levels of earlier major recessions. Inflation is below the double-digit rates seen in the "stagflation" of the '70s and early '80s.

But consumer confidence and the stock market have tumbled. Auto sales are at their lowest point since 1992, and total housing starts this year are expected to be at their lowest level since 1945.

This downturn hasn't officially been ruled a recession, but that seems to be only a technicality. Of the nine recessions since 1950, just two occurred in presidential election years (1960, 1980). The incumbent party lost both times.
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