How do the current financial crisis and recession compare with the Great Depression?
The Great Depression of the 1930s was the most severe U.S. economic downturn of the 20th century. Between 1929 and 1933, the nation’s production of goods and services (GDP) fell nearly 30 percent, the unemployment rate reached 25 percent of the labor force and the consumer price level declined by some 30 percent. The current financial crisis is the most severe since the 1930s. However, the current recession is unlikely to rival the Great Depression. The recession began in the fourth quarter of 2007, but GDP did not begin to contract until the second half of 2008 and has fallen by just 3 percent as of the first quarter of 2009. Many economists expect that GDP will begin to rise in the second half of this year. The unemployment rate reached 9.4 percent in May 2009, its highest level since August 1983. Economists expect that the unemployment rate will continue to rise for a while, but few expect the unemployment rate to come close to Depression levels. In contrast with the deflation of th
