Lasting from December 2007 to June 2009, the Great Recession had a profound impact on America. To one degree or another, the collapse of the housing market and the near-collapse of the banking system that it sparked affected many Americans’ lives. But how much has life really changed since the Great Recession began a decade ago?
A recent study from GOBankingRates dug into the ways the U.S. seriously changed from the Great Recession to now.
The study took a look at several economic factors, comparing just how bad things got during the Great Recession, where they stand today and which areas haven’t necessarily seen a full recovery. The results point toward a booming economy that’s still showing some of the scars of the meltdown of 2008.
One of the most obvious shifts was in the stock market, which plummeted in the aftermath of the collapse. The current market was breaking records, with the Dow Jones Industrial Average blowing past the 26,000 mark this year in January. But on Feb. 8, the Dow saw a 1,033 point drop, reports Yahoo Finance. The next day, CNBC reported the Dow was headed for its worst week since October 2008.
The study also found that the labor market has gone through major upheaval. Although it’s in a much better place now, some negative changes have had a lasting impact. Unemployment during the Great Recession peaked at 10 percent in October 2009, but today it’s at its lowest levels since 2000, just 4.1 percent. That’s good news, but some experts say a low unemployment rate can be one of the warning signs of an upcoming recession.
Other figures point to a labor market that hasn’t completely recovered, like a labor participation rate of just 62.7 percent. That’s still below the 66 percent rate in December 2007, when the recession started.
Finally, although Americans appear to be doing much better financially, they are collectively carrying more debt than prior to the Great Recession, seeming to indicate that there are still some residual effects. However, this can have a big impact on households in a downturn. In fact, another GOBankingRates study found that another recession could mean financial ruin for two-thirds of Americans.
Total student loan debt has nearly tripled from $589 billion in December 2007 to $1.48 trillion in late 2017. Total household debt was at a record level of $12.96 trillion in the third quarter of 2017, blowing past the previous record set during the mortgage-happy days of 2008, at $12.68 trillion.
And finally, Americans have even more credit card debt than they did at the peak of the recession, reaching a level of $1.022 trillion in November 2017 to top the previous high hit during April 2008.
The American economy has its periodic downturns, some worse than others. That’s why it’s always important to have a plan in place for the next one.