The Recession of 1958, also known as the Eisenhower Recession, was a sharp worldwide economic downturn in 1958.[1] The effect of the recession spread beyond United States borders to Europe and Canada, causing many businesses to shut down.[2] It was the most significant recession during the post-World War II boom between 1945 and 1970 and caused a sharp economic decline that only lasted eight months. By the time recovery began in May 1958, most lost ground had been regained. As 1958 ended, the economy was heading towards new high levels of employment and production. Overall, the recession was regarded as a moderate one based on the duration and extent of declines in employment, production, and income.[1]

Causes

There were many major factors in the decline that exerted a growing downward pressure on production and employment, resulting in a general reduction of economic activity.[1]

Consequences

US unemployment rate, 1952–1963
US unemployment rate, 1952–1963

Price and costs

Percent annual change in the US Consumer Price Index, a measure of inflation, 1952–1963
Percent annual change in the US Consumer Price Index, a measure of inflation, 1952–1963

Government actions

Government efforts to promote a prompt economic recovery played an important role in the moderation of the recession. Dwight D. Eisenhower, Raymond J. Saulnier, Robert B. Anderson, and Lyndon B. Johnson were some of the important figures playing major roles in this effort. Eisenhower's main focus was to stimulate recovery while keeping the government's financial “house in order”.[3]

By the end of the recession, the index of industrial production was 142% of the 1947 to 1949 average. Total employment had increased by about 1 million from its recession low while unemployment had been reduced by 1 million. Income and expenditures of individuals were at new high levels. Gross National Product, the broadest measure of the nation's output of goods and services, had risen to an annual rate of $453 billion.[1]

Officially, recessionary circumstances lasted from the middle of 1957 to April 1958.[3]

References

  1. ^ a b c d e f g h i "The Economic Report of the President" (PDF). Monthly Labor Review. The American Presidency Project. U.S. Government Printing Office. 82 (3): 1–225. 1959. Retrieved 20 Oct 2014.
  2. ^ a b c "The Recession of 1958 - Photo Essays". January 1, 2008. Retrieved November 5, 2014.
  3. ^ a b c d e f g h i j k l McClenahan, William M.; Becker, William H. (2011). Eisenhower and the Cold War Economy. Baltimore: Johns Hopkins University Press. ISBN 978-1-4214-0265-9.

Further reading