Job losses caused by the Great Recession

Job losses caused by the Great Recession‏‎

The Great Recession was a period of marked general decline observed in national economies globally during the late 2000s and early 2010s. The scale and timing of the recession varied from country to country. The term "Great Recession" applies to both the U.S. recession, officially lasting from December 2007 to June 2009, and the ensuing global recession in 2009. The economic crisis was the most severe since the Great Depression.

Causes

The Great Recession was precipitated by the bursting of the United States housing bubble which peaked in approximately 2005–2006. High default rates on "subprime" and adjustable rate mortgages (ARM), began to increase quickly thereafter. An increase in loan packaging, marketing and incentives such as easy initial terms, and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms.

Job Losses

The Great Recession led to a significant increase in job losses. The unemployment rate in the United States rose from 5% in December 2007 to peak at 10% in October 2009. The number of unemployed persons increased by 7.6 million. The impact was particularly severe in the manufacturing, construction, and retail sectors, which saw substantial job cuts.

Impact on Global Economy

The Great Recession had a significant impact on the global economy. Many countries, including major economies such as the European Union and China, experienced a slowdown in growth and a rise in unemployment. The global nature of the recession meant that it was not possible for countries to avoid the impact through domestic policy measures alone.

Recovery

Recovery from the Great Recession was slow and uneven. While some sectors and countries rebounded quickly, others remained depressed for years. The long-term impact of the recession includes changes in job market dynamics, with many of the jobs lost during the recession not returning, and new jobs often being in different sectors or requiring different skills.

See Also

• Financial crisis of 2007–2008
• Subprime mortgage crisis
• European debt crisis
• Late-2000s recession in Europe