Economic Status during the 1970's

What is a Recession?

A recession is defined as six to twelve months of negative production growth (GDP) coupled with a rise in unemployment.

Following the Great Depression of the 1930’s the US has been through several recessions but no depressions.

The last US recession occurred in the early 90’s and was followed by the longest period of economic expansion for the US in peacetime.

The Stagflation Factor

After oil-producing nations formed the OPEC alliance in the early seventies, the price of oil and other forms of energy rose dramatically.

The high oil prices affected the US by lowering demand at home and hindering international trade.

Along with the oil shocks, grain shortages and leftover inflation from Vietnam damaged the economy.

The recession in the mid-seventies is notable because unemployment rose and prices rose. Economists call this particular event “stagflation”.