How Long Do Recessions Last?

Learn about typical US recession lengths and influencing factors, noting recent trends with shorter durations averaging 10 months. Investigate how external factors and government decisions affect recession timelines, comparing historical data.

By Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Have a quick question? I answered nearly 1500 FAQs.

A recession is a difficult time for everyone. People lose jobs, prices soar, and businesses slow down production to optimize costs. Economists agree that the US is headed for a recession, and soon. So it is natural to wonder how long will the recession last? Recessions don’t last forever, but let’s see what economists say about what we can expect.

How Long Does the Average Recession Last?

The average recession duration throughout all US history is 17 months. However, the average duration of US recessions in the last 30 years is 10 months, so rest assured that recent recessions have been getting shorter. There are two recent outliers:

  • The Covid-19 pandemic that lasted just 2 months.
  • The Great Recession that lasted 18 months.

Aside from those, recent recessions have been quite close to the average recession duration of 10 months. Both the Federal Reserve and the US government are getting better at using policy to smooth the highs and lows of the business cycle, and therefore keeping the economy more stable. While some of these efforts can trigger a recession if they are mistimed, they can also mean that recessions are milder when they occur.

What Factors Determine How Long Will the Recession Last?

Recessions are a normal part of the business cycle. The economy fluctuates up and down, and sometimes those fluctuations cause a recession.

There are often external factors, like government policy, changes in the interest rate, supply chain disruption, or lack of consumer spending. When external factors are involved, they can often impact how long a recession lasts. How long it takes to resolve the factors involved in causing a recession can impact how long the recession will last.

Another factor that determines how long recessions last is the government’s response to the recession. Quick, effective action by the government and Federal Reserve to address both the recession and the factors that caused the recession will reduce how long the recession lasts. The government and Federal Reserve are both getting better at mitigating and reacting to recessions. They also have long-term strategies in place to address things that could cause big recessions for the US economy.

An example of this is the oil supply. The US government has been stockpiling oil and investing in domestic oil sources since two recessions were triggered by disruptions to the oil supply.

How Long Do Recessions Last Based on Previous Recessions?

Let’s take a look at some of the most recent US recessions to see how long recessions last and what influences how long they last.

1. The Covid-19 Recession: 2 Months

The Covid-19 recession is the shortest recession of recent times. It lasted 2 months, from February 2020 to April 2020. The recession disrupted both the supply chain and consumer demand due to people being confined in their homes during lockdown. It could’ve been one of the worst recessions of recent times due to the disruption to both the supply chain and demand; however, decisive action by the government and the Federal Reserve were responsible for the quick end of the recession. Some examples of the actions include:

  • 3 stimulus checks
  • Emergency programs
  • Increased unemployment benefits
  • Forgivable business loans to be put towards wages

2. The Great Recession: 18 Months

The Great Recession is the longest recession of recent times. It lasted 18 months, from December 2007 to June 2009.

The Great Recession was caused by the housing market bubble burst due to a large number of bad mortgages being loaned during the housing boom. US financial institutions lent large amounts of money to homebuyers with bad credit. These mortgages were sold to high-quality investors by being bundled into mortgage-backed securities.

It all came to a head in 2007 when homebuyers with bad credit were unable to repay their mortgages. Financial institutions went under due to the sheer number of these bad loans, and the housing bubble burst. Homeowners, even the ones with good credit, saw their home values plummet, and many people lost their homes.

The government issued two stimulus checks, and the Federal Reserve reduced interest rates to get people to spend again. However, homeowners who bought during the housing bubble were paying mortgages that cost more than their home was worth. The Great Recession lasted for 18 months, but across the world, the world felt the effects of the recession for 4 years. When questioning how long will the recession last, it is important to remember that the effects of the recession often last longer than the official end of the recession.

After the economy recovered following the recession, the government also passed a policy to ensure that mortgages were better regulated.

3. The Dot Com Recession: 7 Months

The Dot Com Recession lasted 8 months, from March 2001 to November 2001. During the late 1990s, the internet resulted in a flood of innovation. Great sums of money flowed through the stock market as investors scrambled to get a piece of the action.

Millionaires and billionaires were being made almost overnight, so any technology stocks, no matter what the company was, were snapped up. This drove prices up, and many of the stocks were overvalued. As with the housing bubble, the prices couldn’t stay up forever, and the bubble burst, causing the NASDAQ (a tech-heavy index fund) to lose 77% of its value. This caused a recession, though there were exacerbating factors, like September 11.

4. The Gulf War Recession: 9 Months

The Gulf War Recession lasted 9 months, from July 1990 to March 1991. This recession was caused by a number of factors, not just the Gulf War. However, when people think of this recession, they think of the disruption to the oil supply. When Iraq invaded oil-exporting Kuwait, there were massive disruptions to the US’s supply of oil, which caused prices to rise dramatically, affecting the manufacturing and transport of all goods.

Another large contributor to the recession was the collapse of the savings and loans industry. This affected both the real estate and financial industries. During the Gulf War Recession, unemployment rose to 6.8%.

How Long Will the Recession Last?

While there is no way of knowing how long a recession will last until it’s over, economists will consider the factors at play to determine how long the recession is likely to last. They will look at factors like:

  • The GDP
  • The unemployment rate
  • Business investment
  • Consumer spending
  • Federal Reserve activity
  • Government policies

Economists will also analyze historical data to see how the economy was affected by similar circumstances in the past. This will help them predict how that situation is likely to affect the economy based on past patterns. It is not 100% accurate, because there are usually a lot of factors at play, but it does give economists something to base their predictions for how long the recession will last on.

It is worth noting that unforeseen events can cause recessions or affect how long a recession will last. That is what happened during the Covid-19 pandemic. Nobody saw a global pandemic coming, but it affected the economy in a substantial way. The Gulf War Recession is an example of unforeseen events affecting how long an existing recession lasted.

Any predictions that economists make about how long the recession will last is an educated guess. There is no formula for getting an exact answer. There is no expert source of information. Economists can only look at historical data and the circumstances that might impact the economy and therefore how long the recession will last. This gives them an educated guess.

Even when the recession is over, the symptoms that affect everyday people can continue past the official recession end date. It can take a while for businesses to recover and start hiring people again, so unemployment rates can stay low for quite a while. It can take a while for consumer confidence to recover and for households to regain their disposable income, so it takes a while for consumer spending to return (and therefore business profits and production.) So, it is normal for businesses and individuals to feel like the economy is in recession long before the official dates of the recession (as decided by the NBER).

In Conclusion, How Long Will the Recession Last?

There is no concrete way to tell how long the recession will last. Even economists cannot give an exact answer. What they can do is look at the business cycle (economic fluctuations) for patterns of how the economy was affected by similar factors in similar circumstances in the past. For example, they may look at the response by both the government and the Federal Reserve to see how the recession recovery efforts are going.

The average length of a recession in recent years is 10 months, so many people use that as a measure of how long the recession is likely to last. However, the last two recessions were 2 months (the Covid-19 recession) and 18 months (the Great Recession), which were the shortest and longest recession of recent years, respectively.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

What is a default judgment

What is a default judgment

A default judgment is issued when a defendant fails to respond to a lawsuit, allowing the plaintiff to win by default. Understanding this process is crucial for both parties involved in litigation.
What is a quitclaim deed

What is a quitclaim deed

Quitclaim deeds offer a quick way to transfer property ownership without guarantees, distinct from warranty deeds. Ideal for non-sale property transfers among family or into trusts, they require careful legal consideration.
Sole Proprietorship Business License

Sole Proprietorship Business License

Sole proprietorships offer simplicity and fewer formalities for new business owners, with benefits like no separate taxes. Remember, personal and business assets aren't distinct, impacting liabilities and the need for proper licensing.
What is the most important part of your business plan

What is the most important part of your business plan

The executive summary shines as the pivotal element of a business plan, serving as a decisive factor for readers to delve deeper. A comprehensive guide on crafting an impactful business plan, focusing on unique strategies and essential components.
Easy Businesses To Start

Easy Businesses To Start

Unleash your entrepreneurial spirit with these straightforward home-based business ideas, from e-commerce to creative pursuits. Embrace the flexibility and potential for financial independence with diverse options suited for various interests and investment levels.
What is the standard deduction

What is the standard deduction

Understand the IRS standard deduction, a straightforward option for reducing taxable income without needing detailed documentation. Delve into eligibility, amounts for 2023-2024, and considerations for itemizing versus standard deduction.
How to get a business license

How to get a business license

Grasp the essentials of obtaining a business license in California, focusing on local and state-level requirements. Uncover specifics on when and why different types of business licenses are needed.
Why Do Businesses Fail

Why Do Businesses Fail

Uncover the key factors contributing to small business challenges, including financial obstacles, inadequate management, and flawed marketing strategies. Understand the role of a comprehensive business plan in ensuring long-term success.
What is a BOC 3

What is a BOC 3

Understand the essentials of a BOC-3 filing for transportation businesses in California, detailing the designation of process agents for FMCSA certification. Learn the requirements, costs, and benefits of choosing the right process agent for your business.
Standard deduction vs itemized deduction

Standard Deduction vs Itemized Deduction

Understand the key differences between standard and itemized deductions to effectively reduce your taxable income and potentially save on taxes. Choose wisely to maximize your tax benefits based on personal financial details.
How to calculate net income

How to calculate net income

Unveil the significance of calculating net income for business profitability, a key indicator for financial health and decision-making. Understand the formula and practical applications for determining net earnings.
Itemized deductions

Itemized Deductions

Optimize your tax return by understanding the differences between itemized and standard deductions, crucial for minimizing tax liability. Learn the benefits and challenges of itemizing to make informed financial decisions.
What are intangible assets

What Are Intangible Assets

Discover the value of intangible assets like patents and trademarks in your business, crucial for strategic and financial planning. Learn how to manage and amortize these non-physical yet essential resources.
What is accounting

What Is Accounting

Understand the importance of accounting in monitoring financial activities and making informed decisions for your business. Gain insight into accounting fundamentals and its role in legal and tax matters.
Dysfunctional family

Dysfunctional Family

Explore the impact of growing up in a dysfunctional family, where constant conflict, neglect, and various addictions shape childhood experiences. Understand common traits, the consequences on children, and the cycle of unhealthy parenting behaviors.
When Was the Great Recession

When Was the Great Recession?

Delve into the Great Recession's timeline, an era of financial distress from December 2007 to June 2009. Understand the causes, including the 2007 housing bubble crash, and worldwide effects.
When Was the Last Recession in the US

When Was the Last Recession in the US?

Review discussions on America's most recent downturn, comparing the impacts and definitions of Covid-19 and the Great Recession. Analyze the significant effects of past economic crises on US policy and business approaches.
What to Invest in During a Recession- 4 Ideas

What to Invest in During a Recession: 4 Ideas

Uncover effective strategies for investing during a recession, assessing personal goals and current market situations. Examine four robust investment approaches to manage through economic declines effectively.
Will the US Get Hit with a Recession in 2024

Will the US Get Hit with a Recession in 2024?

Experts debate the likelihood of a 2024 US recession, analyzing factors like the yield curve and consumer confidence. Predictions vary, with a focus on interest rates and tech layoffs impacting the economy's future.
How Long Do Recessions Last

How Long Do Recessions Last?

Learn about typical US recession lengths and influencing factors, noting recent trends with shorter durations averaging 10 months. Investigate how external factors and government decisions affect recession timelines, comparing historical data.
When Will the Recession End

When Will the Recession End?

Economists predict a mild US recession with limited impact on employment and spending. The duration and impact of the recession depend on Federal Reserve policies and business cycle patterns.

When not to sign a severance agreement?

Do not sign a severance agreement if you do not understand it. By agreeing to a severance agreement, you give up your right to sue your employer. Remember, it is possible to negotiate the terms of your severance package. You are not required to sign a severance agreement.

How Do You Deal with a Toxic Business Partner?

Address concerns directly to the bad business partner; communicate openly and clearly. Consider mediation or seek legal advice from a business dispute attorney. Document disagreements, consider amicable separation if necessary.

Contact our attorney.

Please tell us your story:

2 + 0 = ?