Recession of 1958
Encyclopedia
The Recession of 1958 was a sharp worldwide economic downturn in 1958, and the most significant one during the post-World War II boom between 1945 and 1970.
It hit economically disadvantaged countries hardest, because it involved a decline in the purchases of raw materials, both agricultural and mineral, by developed nations. The terms of trade
of the underdeveloped countries was adversely affected. In Europe no less than in the United States there was a fairly sharp decline in investment in fixed capital. In the United States, unemployment rose but there was little or no decline in personal income. Auto sales fell 31% over 1957, making 1958 the worst auto year since World War II
. Unemployment in Detroit stood at a high of 20% by April. Imports into the United States from Europe stayed high, but the recession in Europe reduced European purchases of American raw materials. And so the balance-of-payments deficit in the United States sharply increased. In Europe, however, a surplus in their balance of payments
developed.
Normally prices fall during recessions but this time they went up, apart from raw materials. In the U.S. consumer prices rose 2.7% from 1957 to 1958, and after a pause they continued to push up until November, 1959. Wholesale prices rose 1.6% from 1957 to 1959. The continued upward creep of prices became a cause of concern among economists.
Politically in the U.S. the Democratic party made major gains in the off-year elections
.
It hit economically disadvantaged countries hardest, because it involved a decline in the purchases of raw materials, both agricultural and mineral, by developed nations. The terms of trade
Terms of trade
In international economics and international trade, terms of trade or TOT is /. In layman's terms it means what quantity of imports can be purchased through the sale of a fixed quantity of exports...
of the underdeveloped countries was adversely affected. In Europe no less than in the United States there was a fairly sharp decline in investment in fixed capital. In the United States, unemployment rose but there was little or no decline in personal income. Auto sales fell 31% over 1957, making 1958 the worst auto year since World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
. Unemployment in Detroit stood at a high of 20% by April. Imports into the United States from Europe stayed high, but the recession in Europe reduced European purchases of American raw materials. And so the balance-of-payments deficit in the United States sharply increased. In Europe, however, a surplus in their balance of payments
Balance of payments
Balance of payments accounts are an accounting record of all monetary transactions between a country and the rest of the world.These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers...
developed.
Normally prices fall during recessions but this time they went up, apart from raw materials. In the U.S. consumer prices rose 2.7% from 1957 to 1958, and after a pause they continued to push up until November, 1959. Wholesale prices rose 1.6% from 1957 to 1959. The continued upward creep of prices became a cause of concern among economists.
Politically in the U.S. the Democratic party made major gains in the off-year elections
United States House election, 1958
The U.S. House election, 1958 was an election for the United States House of Representatives in 1958 which occurred in the middle of Dwight Eisenhower's second term.The economy was suffering the Recession of 1958, which Democrats blamed on Eisenhower...
.