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1980's
The economy slows because of "stagflation," the economic problem of excess capacity and unemployment coexisting with inflation and no economic growth. The S&L industry has huge volumes of low, fixed-rate mortgages that were issued in the 1950s and 1960s. The gap between what the S&Ls earn on these mortgages and what S&Ls pay for new deposits erodes the capital of the S&Ls.https://www.fdic.gov/about/history/timeline/1980s.html -
1981
The economy officially entered a recession in the third quarter of 1981, as high interest rates put pressure on sectors of the economy reliant on borrowing, like manufacturing and construction. Unemployment grew from 7.4 percent at the start of the recession to nearly 10 percent a year later. -
1982
By October 1982, inflation had fallen to 5 percent and long-run interest rates began to decline. The Fed allowed the federal funds rate to fall back to 9 percent, and unemployment declined quickly from the peak of nearly 11 percent at the end to 1982 to 8 percent one year later (Federal Reserve Bank of St. -
1983
By 1983, the economy had rebounded and the United States entered into one of the longest periods of sustained economic growth since World War II. The annual inflation rate remained under 5 percent from 1983 through 1987. Still, serious problems remained. -
1984
In the first quarter of 1984, gains in employment and production accelerated at near-record rates; new-auto sales rose to their highest levels since 1979; and housing starts reached their highest rates since 1978. Indirect evidence of the recovery's strength was equally impressive. -
1985
The U.S. economy continued on an upward path in 1985, but its upward momentum slowed considerably in the first half of the year. While economic growth was supported by a healthy growth in the demand for goods and services, domestic production grew sluggish because the demand was met in part by imports from abroad -
1986
1986 was a year of slow growth and moderate inflation, though both were slightly less than had been expected. However, the year contained an unusually large number of momentous events and developments, at home and abroad. -
1987
The first contemporary global financial crisis unfolded in the autumn of 1987 on a day known infamously as “Black Monday.”1 A chain reaction of market distress sent global stock exchanges plummeting in a matter of hours. -
1988
Economic output grew moderately in 1988, employment expanded rapidly, and the unemployment rate declined. Inflation picked up somewhat during the year compared with 1987 -
1989
the economy was weakening as a result of restrictive monetary policy enacted by the Federal Reserve. At the time, the stated policy of the Fed was to reduce inflation, a process which limited economic expansion.