The U.S. economy was faced with a rocky road full of ups and downs in 2009. As students, we are both directly and indirectly affected by the current economic condition.
In an effort to provide you with context on the events that happened last year, the business section of The Ticker compiled the major events affecting the U.S. economy that happened during 2009, in a monthly basis.
January — Barack Obama is sworn in as the 44th president of the United States on Jan. 20, amid national financial turmoil. The Dow Jones Industrial Average had fallen by 4 percent, its worse inauguration-day performance.
February — The U.S. Senate approved a stimulus bill of $787 billion proposed by President Obama, with the goal of creating 3.5 million jobs in the next two years. The package aimed to lift the economy out of recession by injecting money into infrastructure, energy, education and healthcare sectors as well as issuing tax cuts to both individuals and businesses.
March — The Dow Jones Index plunged to 6,547 in March, a 12-year low. Having received $170 billion in bailout funds from the U.S. government, A.I.G. announced $165 million bonuses for its top executives on March 14. Public outrage pushed President Obama to order Treasury Secretary Timothy Geithner to block the firm’s attempt. Since the bailout, the public has paid close attention to Wall Street bankers’ paychecks.
April — Signs of recuperation surfaced when several financial giants such as Goldman Sachs, J.P. Morgan Chase and Citigroup posted profits for the first quarter of the year.
May — Chrysler filed for bankruptcy on May 1. The results of stress tests, which were conducted by the Federal Reserve Bank on the nation’s 19 largest financial institutions, were announced on May 7. The outcomes indicated that at least seven banks, including J.P. Morgan Chase and Goldman Sachs, needed to raise an additional $65 billion in capital by November. The forecast turned out to be more optimistic than the industry had expected.
June — General Motors Corp. became the second-largest industrial bankruptcy in history, together with Chrysler, marking the downfall of the country’s first- and third-largest car manufacturers. In exchange for more than $50 billion funds given to the company, the United States now owns 60 percent of the new GM. The taxpayers had signed a check totaling $100 billion to rescue the car industry. In addition, Bernard Madoff, who formulated the multibillion-dollar Ponzi scheme, was sent to prison for a 150-year sentence.
July — Goldman Sachs dominates the game as its rivals were severely hurt by the financial meltdown. It posted a second quarter gain, the most profitable one in the company’s history. China led Asia out of the gloom with a 7.9 percent growth in the second quarter, raising hope in the midst of a global recession.
August — Using $2.87 billion from the economic stimulus package, the U.S. government instituted the “cash for clunkers” program. It compensated car buyers up to $4,500 for trading in old cars for new vehicles that were more fuel-efficient. As a result, auto sales soared significantly and contributed 1.7 percentage points to the nation’s gross domestic product growth. President Obama nominated Ben Bernanke as chairman of the Federal Reserve for a second term on Aug. 26.
September — Leaders of the G-20 nations met at Pittsburgh to discuss economic policies. At the summit, the United States proposed solutions to tackle its rising budget deficit. The U.S. dollar depreciated to its lowest level in a year while the value of gold continued to rise and stayed near $1,000 per ounce.
October — The national unemployment rate, which started at 7.6 percent in January, rocketed to 10.2 percent in nine months. The U.S budget deficit ballooned to $1.4 trillion, or about 10 percent of the national GDP, the biggest figure since World War II.
November — The unemployment rate decreased slightly to 10 percent. CIT Group Inc., one of the nation’s biggest funders of small and medium-sized businesses, filed for the fifth largest bankruptcy in U.S. history.
December — The financial institutions gradually hauled themselves out of the swamp. Citigroup Inc. and Wells Fargo & Co. began the process of paying back the government a total of $45 billion, distributed through the Troubled Asset Relief Program. Goldman Sachs, J.P. Morgan Chase and Morgan Stanley had paid back the money in June. On Christmas Eve, the Senate approved Obama’s healthcare plan. The 10-year measure that costs $871 billion aims to expand insurance coverage to more than 30 million Americans. Holiday retail sales bounced up by 3.6 percent from the previous year.
Monthly recap of business events in 2009
Published: Friday, February 5, 2010
Updated: Friday, February 5, 2010 20:02
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