The Great Recession

Basics
The Great Recession was a direct consequence of the housing bubble, and the financial chicanery that abetted it. For about a decade beginning in the late 1990s, housing values pushed well ahead of the inflation rate, creating a bubble of over $1 trillion dollars in illusory wealth—against which homeowners borrowed, and refinanced. When the bubble burst, the economy lost about $1 trillion in effective demand for goods and services—about half due to the collapse of the housing and construction market, about half due to declining consumption. So, while the effects on the housing market were devastating (a spiraling foreclosure rate, tens of millions of “underwater” mortgages), so too were the effects on the broader economy.

A net loss of 8 million jobs, from which we are only beginning to recover

An even deeper jobs deficit, since the working age population has continued to grow as job losses mounted

A persistently high unemployment rate, particularly for the most vulnerable: as of April 2011, about 17 percent for African-American, 12 percent for Latinos, 15 percent for those without a college diploma, and 25 percent for youth.

Even as jobs recover, job quality continues to decline. The share of the population with employer-provided health insurance, for example, is now at under 56 percent—the lowest share recorded since the Census Bureau began measuring this in 1987.

Median family income has fallen steadily since the start of the recession, and is now at its lowest level since the late 1990s. And the poverty rate has crept up, now—at just under 15 percent—at its highest rate since 1994.

The hit to family wealth—reflecting the recessionary labor market and the loss in home equity--is even more dramatic, and rates of household debt (while down from their peak in 2007) are still near an all-time high.

Learn More
For incisive and accessible reporting on the recession, the first stop is the work of Dean Baker at the Center for Economic and Policy Research. The Economic Policy Institute tracks the jobs picture--in its regular and ongoing publications, with Economy Track, a series of interactive charts on jobs and economic performance, and with regular data updates to its signature State of Working America report. The Center for Budget and Policy Priorities tracks both the recession’s impact and the that of recovery policies and options; see especially their excellent chartbook on the recessions's legacy. Moody's Analytics (www.economy.com) is a good gateway for economic, financial and consumer credit data, research, analysis and forecasting. The Federal Reserve Bank of Minneapolis interactive chartbook, “The Recession in Perspective” allows browsers to compare the current recession with past recessions at the national or state level.

Video: The Recession in Perspective

Recent Research Highlights

Asset Poverty (March 2011)

Added November 21, 2011 Source: Demos
Issue: The Great Recession
State: General Interest

Added November 21, 2011 Source: Policy Matters Ohio
Issue: The Great Recession
State: Ohio

Added November 18, 2011 Source: Demos
Issue: Spotlight on Inequality, The Great Recession
State: Michigan

Added September 9, 2011 Source: Keystone Research Center
Issue: The Great Recession
State: Pennsylvania

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