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How Long Will The Current Recession Last?

While the signs of a recession have been visible for months, the fact that we are currently in a nationwide --and even worldwide-- recession is now official. And according to experts, we've been in that recession since December of 2007. This news probably comes as a surprise to no one. Many people are losing their jobs, struggling to pay their bills, and seeing their investments slip out from underneath them. Even those of us who spend much more time on internet dating sites than on financial news sites can feel the pinch.

So the question on every American's mind is... how long will the current recession last?

Looking at Past Recessions

Because this recession has been calculated to have begun in December of 2007, it's already the fourth longest recession the country has experienced in eighty years. Many say that this recession is gearing up to be the most severe in decades.

But in order to know what that means --and if it's time to panic-- it's important to look at the past major recessions of the last 80 years or so.

The most recent recessions on record were in 1990 to 1991, and then again in 2001. Those recessions, though, were short economic downturns and were not particularly deep. It isn't difficult for the current recession to beat out those recent recessions in both length and intensity. A closer comparison to today's recession can be found in the one that took place from 1981 to 1982, and lasted a total of 16 months.

As far as recessions go, the one that took place in the 1980's was longer than usual. And it was also deeper, with employment rates at 10.8% at their worst. By the standards of the time and the standards of today, it was a very deep, very serious recession. And it really helps to put the recession that we're currently experiencing into perspective.

Currently, the unemployment rate in the U.S. is hovering at about 6.5%. This is more than four points less that that of the 1981-1982 recession. And, according to experts, a huge amount of damage would need to be done to our economy (in addition to the significant damage already done, of course) in order to take the current unemployment rates up to 10% or more. An encouraging piece of news for those of us worried about our jobs and our income.

But still, theories and conjectures are flying around, and many comparisons are being made to the Great Depression, when most of the country was poor and unemployment rates shot up to 25%. For those of you out there worrying that the next years will see a repetition of this situation... you don't have to. Almost all of the experts out there insist that it's not possible for the economy to suffer the same damage today that it did in the 1930s. There are just too many differences in the way that things are run.

So if today's recession is so different from the Great Depression and the recession of the early 80's, how can experts possibly predict how long it will last? Well, while predictions are only that --predictions-- economists are looking at the way recessions behave in general to predict what the current one will do.

Since World War II, the average length of the 10 recessions that took place up until today is about 10 months. But because the current recession has already lasted more than 12 months (having begun in December of 2007) and is clearly coming to no end soon, the prediction is that this will be another 16-month recession, like that of 1973-75 and 1981-82. This puts the end of the recession in the middle of 2009.

Of course, predictions aren't always accurate, and there's a possibility that this recession will be deeper and longer than experts suggest. But for those of us worried that another Great Depression is on the horizon, the predictions being made about the current situation are a little ray of hope that, perhaps, things aren't as bad as they seem.

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