The slow but steady recovery from the Great Recession just hit a milestone: It’s tied for the second-longest economic expansion in American history.
The recession ended in June 2009, which means the recovery is 106 months old through April of this year. That matches the expansion from 1961 to 1969, an era of big government spending under President John F. Kennedy and then President Lyndon Johnson’s Great Society.
Unlike the breathtaking growth of the 1960s, the current expansion won’t set any records for speed. It took far longer than many hoped for unemployment to get back to healthy levels. Wages have only recently begun to accelerate meaningfully.
Yet the very fact that the economy didn’t roar back to life from the financial crisis extended the life of the recovery. The slow speed prevented it from overheating.
“The silver lining is this very long economic expansion,” said Moody’s Analytics chief economist Mark Zandi. “We didn’t experience the same boom-to-bust cycle that we had in the past.”
Low and slow
Scarred by the 2008 meltdown, businesses and individuals were reluctant to take on risks during the early years of the recovery. Many were still working off the debt from the last boom.
“Everyone ran for the proverbial economic bunker, and it was hard to coax them back out,” Zandi said. “People were shell-shocked.”
The absence of explosive growth and problematic inflation meant the Federal Reserve didn’t have to step in with aggressive rate hikes aimed at cooling the economy down. Low rates and steady growth allowed the stock market to quadruple from its March 2009 low.
Economists don’t see a recession on the near horizon, meaning the recovery has a real shot at staying alive until July 2019, when it would surpass the 1991-2001 boom as the longest on record. That expansion lasted exactly 10 years and was powered by the rise of the internet.