Early 1990s recession in the United States

The United States entered recession in July 1990, which lasted 8 months through March 1991. Although the recession was mild relative to other post-war recessions, it was characterized by a sluggish employment recovery, most commonly referred to as a jobless recovery. Unemployment continued to rise through June 1992, even though economic growth had returned the previous year.

Belated recovery from the 1990-1991 recession contributed to Bill Clinton's victory in the 1992 presidential election, during which Clinton was successful in attributing slow economic growth to incumbent president George H. W. Bush.

Throughout 1989 and 1990, the economy was weakening as a result of restrictive monetary policy enacted by the Federal Reserve. At the time, the stated policy of the Fed was to reduce inflation, a process which limited economic expansion. Another factor that may have contributed to the weakening of the economy, was the passing of the Tax Reform Act of 1986 which led to the end of the real estate boom of the early to mid-1980's resulting in sinking property values, lowered investment incentives, and job loss. Measurable changes in GDP growth began to emerge in the first quarter of 1990, however, overall growth remained positive. The immediate cause of the recession was a loss of consumer and business confidence as a result of the 1990 oil price shock, coupled with an already weak economy.

July 1990 marked the end of what was at the time the longest peacetime economic expansion in U.S. history. Prior to the onset of the early 1990s recession, the nation enjoyed robust job growth and a declining unemployment rate. The Labor Department estimates that as a result of the recession, the economy shed 1.623 million jobs or 1.3% of non-farm payrolls. The bulk of these losses were in construction and manufacturing. Among the hardest hit regions were the New England states and the west coast, while the Midwest and south central were less affected.

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