The 1960-61 Recession: Ten Months Before the 1960s Boom
The 1960-61 recession ran 10 months, from April 1960 to February 1961 (NBER). Real GDP fell only 0.1% peak to trough, but unemployment rose from 5.2% to 7.1%. It followed Federal Reserve tightening in 1959 and was followed by the 106-month expansion of the 1960s.
The recession in numbers
- NBER peak and trough
- April 1960 to February 1961 (Q2 1960 to Q1 1961) · NBER
- Real GDP, peak to trough quarter
- -0.1% · BEA, FRED GDPC1
- Worst quarter
- Q4 1960, -5.0% annualised · BEA, FRED GDPC1
- Unemployment rate
- 5.2% (Apr 1960) to 7.1% (May 1961) · BLS, FRED UNRATE
- Consumer price inflation
- 1.5% (1960, annual average) · BLS CPI, FRED CPIAUCSL
- Federal funds rate
- 4.00% (Nov 1959) to 1.45% (Jan 1961) · Federal Reserve, FRED FEDFUNDS
- Industrial production
- -8.6%, January to December 1960 · Federal Reserve, FRED INDPRO
- Preceding expansion
- 24 months, April 1958 to April 1960 · NBER
- Following expansion
- 106 months, to December 1969 · NBER
A short expansion and tight money
The economy came out of the 1957-58 recession in April 1958 and grew quickly through 1959. The Federal Reserve, concerned about inflation, raised short-term rates: the federal funds rate averaged 3.39 percent in June 1959 and 4.00 percent in November (FRED FEDFUNDS). Inflation was low by later standards, 1.5 percent in 1960 on an annual-average basis (BLS CPI). The expansion lasted just 24 months before NBER's April 1960 peak.
A mild fall in output, a bigger rise in unemployment
Real GDP was almost unchanged across the recession: 0.1 percent lower in Q1 1961 than in Q2 1960 (BEA). The worst single quarter was Q4 1960, at a 5.0 percent annualised decline. Industrial production fell 8.6 percent between January and December 1960 (Federal Reserve).
Unemployment rose from 5.2 percent in April 1960 to 6.1 percent by October and kept rising after the trough, peaking at 7.1 percent in May 1961 (BLS). That pattern, a labour-market peak a few months after NBER's trough, recurs in many postwar recessions.
Easing and recovery
The Fed eased through 1960: the funds rate averaged 1.98 percent in December 1960 and 1.45 percent in January 1961. NBER dates the trough to February 1961. Real GDP grew at a 7.0 percent annualised rate in Q2 1961, and the expansion that followed ran 106 months to December 1969, the longest on record until the 1990s. It ended in the 1969-70 recession.
For all twelve postwar cycles side by side, see the post-WWII recessions table; for average durations, see how long recessions last.
Frequently Asked Questions
When was the 1960-61 recession?
NBER dates it from an April 1960 peak to a February 1961 trough, ten months. It came only 24 months after the end of the 1957-58 recession, one of the shortest expansions of the postwar period.
How bad was the 1960-61 recession?
Mild in GDP, noticeable in jobs. Real GDP was 0.1 percent lower in Q1 1961 than in Q2 1960 (BEA), though Q4 1960 alone fell at a 5.0 percent annualised rate. Unemployment rose from 5.2 percent in April 1960 to a peak of 7.1 percent in May 1961, three months after the trough (BLS). Industrial production fell 8.6 percent from January to December 1960.
What caused the 1960-61 recession?
Tight money after the 1958-59 recovery. The Federal Reserve raised short-term rates through 1959, and the federal funds rate averaged 4.00 percent in November 1959, when inflation was only about 1.5 percent a year. The economy lost momentum in the first half of 1960, and NBER places the peak in April.
Did the 1960-61 recession affect the 1960 election?
It came in an election year: the recession began in April 1960, unemployment was 6.1 percent in October and November 1960 (BLS), and John F. Kennedy, who campaigned on getting the economy moving again, won in November. The trough came in February 1961, a month after Kennedy took office.
What came after the 1960-61 recession?
The longest expansion on NBER's record at the time: 106 months, from February 1961 to December 1969. Real GDP grew at a 7.0 percent annualised rate in Q2 1961. The expansion ended with the 1969-70 recession.
How these figures were made: NBER's monthly and quarterly turning points; real GDP change between NBER's peak and trough quarters, computed from BEA chained-dollar GDP (FRED GDPC1); unemployment and interest rates are monthly values from FRED as published in October 2026. Sources: NBER business cycle dates; BEA real GDP (FRED GDPC1); BLS unemployment (FRED UNRATE); BLS CPI (FRED CPIAUCSL); federal funds rate (FRED FEDFUNDS); industrial production (FRED INDPRO).