Downtimes Are the Norm

A recession is defined as a contraction in the economic cycle and is measured from the peak to the trough when it stops. The picture is made worse when you add in all the major stock market falls that don't have the decency to coincide with the start of or impact on recessions. Recessions are a lot more common than you might think. There were over 20 in the United States during the last century, as illustrated in Table 18-1. And bad debts soar when the economic climate clouds over. No firm is immune, so you must know how to plan for them.

Table 18-1 U.S. Recessions

Recession

Started

Ended

Length'

1

September 1902

August 1904

23 months

2

May 1907

June 1908

13 months

3

January 1910

January 1912

24 months

4

January 1913

December 1914

23 months

5

August 1918

March 1919

7 months

6

January 1920

July 1921

18 months

7

May 1923

July 1924

14 months

8

October 1926

November 1927

13 months

9

August 1929

March 1933

43 months

10

May 1937

June 1938

13 months

11

February 1945

October 1945

8 months

12

November 1948

October 1949

Continued

Table 18-1 (continued)

Recession

Started

Ended

Length'

13

July 1953

May 1954

10 months

14

August 1957

April 1958

8 months

15

April 1960

February 1961

10 months

16

December 1969

November 1970

11 months

17

November 1973

March 1975

16 months

18

January 1980

July 1980

6 months

19

July 1981

November 1982

16 months

20

July 1990

March 1991

8 months

21

March 2001

November 2001

8 months

1 Measured from Peak to Trough

Source: National Bureau of Economic Research

1 Measured from Peak to Trough

Source: National Bureau of Economic Research

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