US economy witnesses 23 months of recession

Amid hopes of economic revival and worries of rising unemployment, the US economy has been in recession for 23 months, one of the longest periods since the 1930s Great Depression.

Battered by the ravaging financial meltdown, the US has witnessed steep economic contraction and massive job losses, forcing the Federal government to come up with unprecedented policy measures.

The US economy officially slipped into recession in December 2007 and shrank as much as 6.4 per cent in the first three months of this year.

With the failure of then Wall Street major Lehman Brothers in September 2009, the economic situation worsened even pushing the global financial system into a tizzy.

Millions of jobs have also evaporated since the Lehman collapse and the unemployment rate stood at 9.7 per cent in August.

In addition, the count of bank failures are shooting up by the day, with a staggering 95 entities going belly up in just nine months.

However, hopes of an early economic turnaround are rising, especially with the GDP contracting much less than expected in the second quarter of 2009.

For the three months ended June, the nation's economy shrank 0.7 per cent, lower than the earlier projection of one per cent contraction. This was mainly due to smaller fall in non-residential fixed investment and in exports, among others.