Recession of 1949 explained

The recession of 1949 was a downturn in the United States lasting for 11 months. According to the National Bureau of Economic Research, the recession began in November 1948 and lasted until October 1949.^[1]

The 1949 recession was a brief economic downturn; forecasters of the time expected much worse, perhaps influenced by the poor economy in their recent lifetime.^[2] The recession began shortly after President Truman's "Fair Deal" economic reforms. Many regard the aftermath of the end of World War II to be the main cause of the recession. According to C. A. Blyth, "the most important cause of 1948–1949 recession was substantial fall in the fixed investments".^[3] The recession also followed a period of monetary tightening by the Federal Reserve.^[4]

During this recession, the gross domestic product of the United States fell 1.7 percentage points. In October 1949, the unemployment rate reached its peak for the cycle of 7.9 percent.^[5] Department store sales fell 22%. The wholesale price and cost of living indexes fell 12 and 5 points respectively.^[6]

Further reading

• Book: Friedman. Milton. Milton Friedman. Schwartz. Anna J.. Anna Schwartz. A Monetary History of the United States, 1867–1960. A Monetary History of the United States. 1993. 1963. University of Chicago Press. Chicago. 604–610. 978-0691003542.
• Book: Meltzer, Allan H.. Allan H. Meltzer. A History of the Federal Reserve – Volume 1: 1913–1951. 2003. University of Chicago Press. Chicago. 667–681. 978-0226520001.
• Book: Bremner, Robert P.. Chairman of the Fed: William McChesney Martin Jr. and the Creation of the American Financial System. 2004. Yale University Press. New Haven, CT. 69–72. 978-0300105087.

Notes and References

1. Web site: 2008-10-01. NBER Business Cycle Expansions and Contractions . NBER .
2. Book: Business Cycles: Theory, History, Indicators, and Forecasting. Zarnowitz, Victor. Victor Zarnowitz. University of Chicago Press. Chicago. 1996 . 0-226-97891-5 . 416.
3. Arnold Zellner . August 1957 . Consumption and the Consumption Function in the U.S. 1948-1949 Recession . The Review of Economics and Statistics . 39 . 3 . 303–311 . 10.2307/1926046.
4. Web site: 2008-03-05. The Current Economic Recession. Congressional Research Service. 2002-01-10. Labonte, Marc. dead. https://web.archive.org/web/20091010043009/http://fpc.state.gov/documents/organization/7962.pdf. 2009-10-10.
5. http://www.bls.gov/cps/ Labour Force Statistics from the Current Population Survey
6. 10.2307/2227168. The Recession of 1948-49 in the United States. D. Hamberg. The Economic Journal. 62. 245. March 1952. 1–14.