GDP 80s Redux?

The Great Recession is now in our rear-view mirrors and with GDP growth of 5.7 in the fourth quarter, the recovery looks well underway. However, the surge in growth is unlike anything we have seen in a while. The recessions of the early 2000’s and 1990’s saw inconsistent growth after the recession ended. After the 2001 recession, growth peaked at 3.5% before falling back to 0.1% by 2002. The early 90’s recovery saw growth reach 4.5% before declining to a tepid 0.7% a year later.

However the 1980s recession may once again be our best guide for how the current recession may fare.

The recession ended in 1982 and by 1983, the U.S. economy was growing at extremely healthy rates. Between Q1 of 1983 and Q2 of 1984, average GDP growth was more than 7 percent. This is not to say the U.S. economy will replicate this pace of growth in the quarters ahead, but we have previously seen the rubber-band effect after deep recessions and there is no reason why it couldn’t happen again.

About Kathy Lien 235 Articles

Kathy Lien is an Internationally Published Author and Chief Strategist of, one of the world’s most popular online websites for currency research. Her trading books include the highly acclaimed, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2005, Wiley); High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia); and Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley). As Chief Currency Strategist at FXCM, Kathy is responsible for providing research and analysis for DailyFX, the research arm of FXCM. She also co-edits the BK Forex Advisor, an Premium Service with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 2 Trillion/day FX market.

Kathy is also one of the authors of Investopedia’s Forex Education section and has written for, the Asia Times Online, Stocks & Commodities Magazine, MarketWatch, ActiveTrader Magazine, Currency Trader, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She has also hosted trader chats on EliteTrader, eSignal and FXStreet, sharing her expertise in both technical and fundamental analysis.

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