More mild estimates suggest drops of 8 to 15 percent. Nor can the pandemic be blamed for the 1921 recession, because “by then the decline in output had all to do with a collapse in commodity prices when post-war European production finally recovered.”. The 1958 recession officially started in August, 1957, and ended in April, 1958, with 2.5 million unemployed by December of ’57, according to the … In February 1957, a new influenza A (H2N2) virus emerged in East Asia, triggering a pandemic (“Asian Flu”). Overall, the economy declined by approximately 2 percent during both the first and second quarter of 1958, but this could not all be attributed to the effects of the virus. The pandemic of 1957–58 was a serious and deadly problem for many. But the emphasis then was on increasing medical services rather than state-enforced quarantines and “social distancing” measures. One study contends that the current economic downturn could lead to seventy-five thousand “deaths of despair.” This is not shocking, however, since the fatal effects of unemployment and economic decline have been known for decades. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. [3], Sharp worldwide economic downturn in 1958, Federal Reserve v. Investment Co. Institute, https://en.wikipedia.org/w/index.php?title=Recession_of_1958&oldid=978011412, Creative Commons Attribution-ShareAlike License. As of April 2020, the unemployment rate has ballooned to 14.4 percent, the highest rate recorded since the Great Depression. The effect on prices and costs was an apparent paradox, as prices continued to rise while production and employment were declining. In 1957–58, there was concern over the availability of medical services. Yet, we will see that neither produced economic damage on a scale we now see as a result of the government mandated lockdowns. Absenteeism did not rise to the level of causing shortages: Available data on industrial absenteeism indicate that the rates were low and that there was no interruption of essential services or production. Enforcement of this policy is at the discretion of this websites administrators. Unemployment had fallen to 5 percent by June of 1959. Why Didn’t the 1958 and 1918 Pandemics Destroy the Economy? In the 1950s, as today, consumers were looking for convenience and a seamless experience from their local bank. Required fields are marked *. Charles Schwab's CEO Walt Bettinger recently announced the company is providing $1,000 to all employees under the director level for personal, family, or living expenses and promised not to lay off any employees due to COVID-19 or market volatility. Absenteeism did not rise to the level of causing shortages: Available data on industrial absenteeism indicate that the rates were low and that there was no interruption of essential services or production. In new work, Velde (2020) shows that most indicators of aggregate economic activity suffered modestly, and those that did decline more significantly right after the influenza outbreak, like industrial output, recovered within months.