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The Most Important Least-Noticed Economic Event of the Decade
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The Most Important Least-Noticed Economic Event of the Decade

A localized recession in manufacturing-heavy areas can explain a lot of things.


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Many people in the United States in 2015 and 2016 were unaware that a “mini-recession” was going on at the time. Back then, emerging markets were weakening, the US dollar was strengthening and commodity prices were falling, stifling the US agricultural, energy and related manufacturing sectors. But according to financial journalist Neil Irwin in this astute analysis, then-Federal Reserve chair Janet Yellen did notice it, and she acted to avoid turning an isolated contraction into a more widespread recession. Readers will find this a revealing look inside the Fed’s thinking.

Take-Aways

  • Weakening emerging markets, falling commodity prices and a strengthening dollar sank the US agricultural, energy and related manufacturing sectors in 2015 and 2016.
  • Most Americans were blissfully unaware of this “mini-recession,” mainly because the overall economy kept expanding and the jobless rate continued to drop.
  • Going against the Federal Reserve’s plans to raise interest rates over the course of 2016, then-Fed chair Janet Yellen kept rates low, thereby averting a more widespread recession.

About the Author

Neil Irwin is an author and a senior economics correspondent for The New York Times.