This information is related to the effects of the Great Recession that happened worldwide from 2007 to 2012.
Overview The Great Recession was the worst post-World War II contraction on record. Real gross domestic product (GDP) began contracting in the third quarter of 2008, and by early 2009 was falling at an annualized pace not seen since the 1950s. Capital investment, which was in decline year-on-year since the final quarter of 2006, matched the 1957–58 post war record in the first quarter of 2009. The pace of collapse in residential investment picked up speed in the first quarter of 2009, dropping 23.2% year-on-year, nearly four percentage points faster than in the previous quarter.
Trade and industrial production In middle-October 2008, the Baltic Dry Index, a measure of shipping volume, fell by 50% in one week, as the credit crunch made it difficult for exporters to obtain letters of credit.
In February 2009, The Economist claimed that the 2008 financial crisis had produced a "manufacturing crisis", with the strongest declines in industrial production occurring in export-based economies.
In March 2009, Britain's Daily Telegraph reported the following declines in industrial output, from January 2008 to January 2009: Japan −31%, Korea −26%, Russia −16%, Brazil −15%, Italy −14%, Germany −12%. Some analysts ventured that the world was going through a period of deglobalization and protectionism after years of increasing economic integration.A Global Retreat As Economies Dry Up. The Washington Post. March 5, 2009.Economic Crisis Poses Threat To Global Stability. NPR. February 18, 2009·
Sovereign funds and private buyers from the Middle East and Asia, including China,China heads to Europe for a multi-billion trade deal. People's Daily Online. February 25, 2009. are increasingly buying in on stakes of European and U.S. businesses, including industrial enterprises.Strange rise of Eastern neo-colonialism, The Times of India, January 20, 2008 Due to the global recession they are available at a low price.Sovereign Wealth Funds Bail Out Major Banks, InvestorPlace Asia The Chinese government has concentrated on natural-resource deals across the world,. Reuters. February 19, 2009. securing supplies of oil and minerals.China, taking advantage of global recession, goes on a buying spree. The Christian Science Monitor. February 21, 2009
Retail Mall museums are a new global development resulting from the 2007-2010 global recession, where museums take over large spaces within shopping malls, making beneficial use of empty space, drawing shoppers, and leveraging the foot traffic of the malls to bring more people into museums, exhibits and other educational venues.
Pollution According to the International Energy Agency man-made greenhouse gas emissions would decrease by 3% in 2009, mainly as a result of the Great Recession. Previously emissions had been rising by around 3% per year. The drop in emissions is only the 4th to occur in 50 years.
Unemployment
The International Labour Organization (ILO) predicted that at least 20 million jobs will have been lost by the end of 2009 due to the crisis — mostly in "construction, real estate, financial services, and the auto sector" — bringing world unemployment above 200 million for the first time. The number of unemployed people worldwide could increase by more than 50 million in 2009 as the global recession intensifies, the ILO has forecast.Global unemployment heads towards 50 million, The Times, January 29, 2009
In December 2007, the U.S. unemployment rate was 4.9%.U.S. Department of Labor, Bureau of Labor Statistics, "The Employment Situation: January 2008", January 2008 By October 2009, the unemployment rate had risen to 10.1%. A broader measure of unemployment (taking into account marginally attached workers, those employed part-time for economic reasons, and some (but not all) discouraged workers) was 16.3%. In July 2009, fewer jobs were lost than expected, dipping the unemployment rate from 9.5% to 9.4%. Even fewer jobs were lost in August, 216,000, recorded as the lowest number of jobs since September 2008, but the unemployment rate rose to 9.7%. In October 2009, news reports announced that some employers who cut jobs due to the recession are beginning to hire them back. More recently, economists announced in January 2010 that economic growth in the U.S. resumed in the fourth quarter of 2009,Rampell, Catherine. "Economy Grew at Vigorous Pace in Last Quarter." New York Times. January 29, 2010. and some have predicted that limited job growth will begin in the spring of 2010.Irwin, Neil. "GDP Report Shows Strong Economic Growth." Washington Post. January 29, 2010.
The average numbers for European Union nations are similar to the US ones. Some European countries have been hit by recession very hard, for instance Spain's unemployment rate reached 18.7% (37% for youths) in May 2009 — the highest in the eurozone.Euro zone unemployment reaches 15 million. CBCNews.ca. July 2, 2009. The unemployment timebomb is quietly ticking. Telegraph. July 4, 2009. In the UK, youths bore the brunt of unemployment during the recession.
The rise of advanced economies in Brazil, India, and China increased the total global labor pool dramatically. Recent improvements in communication and education in those countries has allowed workers in those countries to compete more closely with workers in traditionally strong economies, such as the United States. This huge surge in labor supply provided downward pressure on wages and contributed to unemployment. So many people's professional careers have been down to frozen level at this time. There was also change at the management level of the several organisations and due to this there was a huge employee turnover. In brief it can also be described as the collapse of the entire management system of any organisation. It has also been noted that there was an increase in the NPAs of lending by banks.
Health In the United States, the public health workforce decreased by at least 40,000 jobs (about 1/5 of its workforce) between 2010 and 2013, following the Great Recession. As of 2023, it had not recovered.
Although it has been argued that recessions can benefit health, for example through reductions in road traffic accidents when car use reduces due to unemployment, there is a lot of evidence that the Great Recession did widespread damage to health. According to a study of 54 countries, there has been an increase in suicide deaths as a result of the recession. The study cites that there were an estimated 5,000 additional deaths resulting from suicide in the year 2009 alone. In Iceland rates of low birth weight were found to increase after the start of the recession in 2008, although no differences in preterm birth were found. In England, exposure to the Great Recession during pregnancy was associated with financial hardship, and both of these were associated with increased odds of continuing to smoke during pregnancy.
Financial markets
For a time, major economies of the 21st century were believed to have begun a period of decreased volatility, which was sometimes dubbed The Great Moderation, because many economic variables appeared to have achieved relative stability. The return of commodity, stock market, and currency value volatility are regarded as indications that the concepts behind the Great Moderation were guided by false beliefs.
January 2008 was an especially volatile month in world stock markets, with a surge in implied volatility measurements of the US-based S&P 500 index,Markets, Uncertain Times, The Economist, February 4, 2008 and a sharp decrease in non-U.S. stock market prices on Monday, January 21, 2008 (continuing to a lesser extent in some markets on January 22). Some headline writers and a general news columnist called January 21 "Black Monday" and referred to a "global shares crash," though the effects were quite different in different markets.
The effects of these events were also felt on the Shanghai Composite Index in China which lost 5.14 percent, most of this on financial stocks such as Ping An Insurance and China Life which lost 10 and 8.76 percent respectively. Investors worried about the effect of a recession in the US economy would have on the Chinese economy. Citigroup estimates due to the number of exports from China to America a one percent drop in US economic growth would lead to a 1.3 percent drop in China's growth rate.
There were several large Monday declines in stock markets worldwide during 2008, including one in January, one in August, one in September, and another in early October. As of October 2008, stocks in North America, Europe, and the Asia-Pacific region had all fallen by about 30% since the beginning of the year. The Dow Jones Industrial Average had fallen about 37% since January 2008.
The simultaneous multiple crises affecting the US financial system in mid-September 2008 caused large falls in markets both in the US and elsewhere. Numerous indicators of risk and of investor fear (the TED spread, Treasury yields, the dollar value of gold) set records.
Russian markets, already falling due to declining oil prices and political tensions with the West, fell over 10% in one day, leading to a suspension of trading, while other emerging markets also exhibited losses.
On September 18, UK regulators announced a temporary ban on short-selling of financial stocks.Short Selling Restriction On September 19 the U.S. Securities and Exchange Commission (SEC) followed by placing a temporary ban of short-selling stocks of 799 specific financial institutions. In addition, the SEC made it easier for institutions to buy back shares of their institutions. The action is based on the view that short selling in a crisis market undermines confidence in financial institutions and erodes their stability.
On September 22, the Australian Securities Exchange (ASX) delayed opening by an hour after a decision was made by the Australian Securities and Investments Commission (ASIC) to ban all short selling on the ASX. This was revised slightly a few days later.
As is often the case in times of financial turmoil and loss of confidence, investors turned to assets which they perceived as tangible or sustainable. The price of gold rose by 30% from middle of 2007 to end of 2008. A further shift in investors' preference towards assets like precious metals or land is discussed in the media.
In March 2009, Blackstone Group CEO Stephen Schwarzman said that up to 45% of global wealth had been destroyed in little less than a year and a half.Stephen Schwarzman says 45 per cent of global wealth written off by financial crisis. NEWS.com.au. March 11, 2009.
Travel According to Zagat's 2009 U.S. Hotels, Resorts & Spas survey, business travel has decreased in the past year as a result of the recession. 30% of travelers surveyed stated they travel less for business today while only 21% of travelers stated that they travel more. Reasons for the decline in business travel include company travel policy changes, personal economics, economic uncertainty and high airline prices. Hotels are responding to the downturn by dropping rates, ramping up promotions and negotiating deals for both business travelers and tourists. Volume 6, Issue 3
According to the World Tourism Organization, international travel suffered a strong slowdown beginning in June 2008, Volume 6 No. 2 and this declining trend intensified during 2009 resulting in a reduction from 922 million international tourist arrivals in 2008 to 880 million visitors in 2009, representing a worldwide decline of 4%, and an estimated 6% decline in international tourism receipts. Volume 8 No. 1 The decline caused by the recession was further exacerbated in some countries due to the outbreak of the AH1N1 virus.
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