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Recovery FROM 1973 Recession

The document summarizes the economic recovery of the United States following the 1973-1975 recession. It took several years for key economic indicators like GDP, industrial production, and unemployment to return to pre-recession levels. Inflation continued to rise through the decade due to increasing oil prices. The U.S. also took steps to increase domestic oil production and exploration in response to relying too heavily on foreign oil. Overall, the recovery mirrored a typical U-shaped recession recovery but took an extended period of time.

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26 views14 pages

Recovery FROM 1973 Recession

The document summarizes the economic recovery of the United States following the 1973-1975 recession. It took several years for key economic indicators like GDP, industrial production, and unemployment to return to pre-recession levels. Inflation continued to rise through the decade due to increasing oil prices. The U.S. also took steps to increase domestic oil production and exploration in response to relying too heavily on foreign oil. Overall, the recovery mirrored a typical U-shaped recession recovery but took an extended period of time.

Uploaded by

Tamara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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RECOVERY

FROM 1973
RECESSION
BY TAMARA JABBAROVA 050180904
1.
Economic
Recovery
2
◈ In the United States, the economic recovery from the 1973 to 1975
recession had many of the characteristics of a typical U-type recovery.
GNP reached and exceeded its pre-recession level by first quarter
1976. Industrial production had recovered to its pre-recession levels
by the end of 1976. Unemployment, which had reached a peak of 9%
in May 1975, did not dip below 6% until June 1978. The pre-1974
recession level of 4.6% unemployment was not reached again until
November 1997, when the Federal Reserve deviated from its prior
policy.  The price of petroleum products continued to rise throughout
the decade, reaching a peak of about $73 a barrel in 1979 as a result of
the Iranian Revolution, a price not exceeded until 2008 in the wake of
dislocations due to the war in Iraq.
3
4
Leaving the Gold Standard
◈ Leaving the Gold Standard allowed the Americans the
flexibility to increase the money supply in order to curb price
inflation. Price inflation was putting downward pressure on the
American consumer’s ability to continue to lead a comfortable
lifestyle. Decoupling the U.S. dollar from the backing of gold
allowed the U.S. Federal Reserve to increase the money supply
without increasing its physical holdings of gold. This allowed
American consumers easier access to money, decreasing the
impact of price inflation.

5
6
Comparison of longest recessions in US History
Beggining Ending Length (months)

November 1973 March 1975 16

July 1981 November 1982 16

December 2007 July 2009 18

7
2,300,000
 jobs were lost during the recession

8
Increased Exploration
 When the US government saw how reliant they were on
foreign countries for oil, they realized something had to
change. This realization sparked an increase in oil production
and exploration on U.S. soil. By doing this, America was able
to cut oil imports, produce local jobs, and support economic
growth. What was seen as a vulnerability, soon turned into a
strength of the U.S.A.

9
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Economic report proposed by Gerald R. Ford
"Twenty-six years ago, a freshman Congressman, a young fellow with
lots of idealism who was out to change the world, stood before Sam
Rayburn in the well of the House and solemnly swore to the same oath
that all of you took yesterday--an unforgettable experience, and I
congratulate you all.
 Two days later, that same freshman stood at the back of this great
Chamber-over there someplace--as President Truman, all charged up by
his single-handed election victory, reported as the Constitution requires
on the state of the Union.
 When the bipartisan applause stopped, President Truman said, "I am
happy to report to this 81st Congress that the state of the Union is good.
Our Nation is better able than ever before to meet the needs of the
American people, and to give them their fair chance in the pursuit of
happiness. It is foremost among the nations of the world in the search for
peace."
 Today, that freshman Member from Michigan stands where Mr. Truman
stood, and I must say to you that the state of the Union is not good:
Millions of Americans are out of work. 11
12
 The tax cut was effective at
stimulating the economy.

13
THANK
YOU!

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