Saturday, August 8, 2009

Facts About Recessions

The following is a compilation of interesting US recession facts I have collected by examining the DOW indicies between 1929 and now. All facts are compiled as a result of data drawn from yahoo finance and the use of the wikipedia page List of Recessions in the United States.

  • The longest US recession took 84 months to run its course (Depression of 1807)

  • The shortest US recession took just 6 months (Recession of 1980).

  • The average recession/ depression lasts 20 months.

  • The median recession runs 14 months.

  • The current recession has run 9 months.
There have been a total of 14 major recessions or depressions in the US. If we were to plot out the changes in the DOW from the start of each recession to the end of each recession it would look like this:
Highslide JS
As you can see the DOW doesn't always go down or stay down during a recession, in fact the DOW, in some cases, rises over the course of a recession. Lets break this chart into two charts, one where the DOW finished higher at the end of the recession than at its start, and one where it did not:

The are 8 data series where the DOW finishes above where it started. It is interesting to note though that it traditionally does so only during the closing days of the recession.

If we show those recessions where the DOW was lower than where it was when the recession started we end up with 5 series:

In this case the DOW sinks over the course of a recession in a consistent stepwise manner.

This article was written by buyingvalue. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.


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