Consumer Spending Rebounds After Recessions
By Jennifer Heebner, Senior Associate Editor -- JCK Online, 2/1/2002 2:00:00 AM
Research from the American Association of Advertising Agencies, New York, shows that consumer spending increases—sometimes dramatically—after recessions. Measuring from the recession's peak to its bottom, spending rose .84% after the recession of 1960-1961, 12.28% after the 1974-75 recession, and 11.04% after the 1990-91 economic slump.
Also consider data from the U.S. Bureau of Economic Research regarding the six recessions following World War II, when personal consumption expenditures more than doubled nearly every single year after the recessions ended.
For example, personal consumption from 1948 to 1949 increased only 2.7%. But after the first post-World War II recession ended in 1949, the same figure rose 6.4% in 1950. From 1953-1954, consumption rose 2.1% and then shot up 7.2% from 1954-1955. From 1960-1961 spending rose 2%, and in 1962 consumer spending rose 4.9%. In 1971 consumer spending had risen 3.8% over the previous year; in 1972 it rose slightly more than 6%. And in 1975 expenditures rose 2.2%, but they increased 5.8% by the end of 1976. In 1982 consumer spending rose 1.2% and rose 5.5% by the end of 1983. Consumer expenditures didn't double after the recession of 1991-1992, but increases still occurred and preceded the growth anomaly Americans saw in the late 1990s.
Source: The American Association of Advertising Agencies, New York; the U.S. Bureau of Economic Research; and JCK research.
