Part 2 of Double-Dip Recession (jul 1, 1981 – nov 1, 1982)
Description:
Duration: 16 monthsGDP decline: 2.9%
Peak unemployment rate: 10.8%
Reasons and causes:
By the fourth quarter of 1980 inflation was up to 11.1%, prompting the Federal Reserve to raise the fed funds rate to 19% by July 1981.33 As the downturn worsened and joblessness climbed, Volcker resisted repeated demands in Congress to change course.34 By October 1982 inflation had declined to 5%, while unemployment would remain above 10% until mid-1983.3517 Most economists today accept Volcker's arguments at the time that failure to control inflation and restore the Fed's credibility would have led to continued economic underperformance.
Added to timeline:
Date:
jul 1, 1981
nov 1, 1982
~ 1 years and 4 months