page_title: Recession shapes
section_title: V-shaped recession
hierarchical_section_title: Recession shapes / V-shaped recession
caption_attribution_description: English: Quarterly GDP growth from 1951 to 1955, showing the Recession of 1953 in the United States The blue bar shows the Percent Change From Preceding Period in Real Gross Domestic Product (seasonally adjusted at annual rates) The red bar shows the average percent change in GDP growth from 1947 to 2009
context_page_description: Recession shapes are used by economists to describe different types of recessions. There is no specific academic theory or classification system for recession shapes; rather the terminology is used as an informal shorthand to characterize recessions and their recoveries.
  The most commonly used terms are V-shaped, U-shaped, W-shaped, and L-shaped recessions. The shapes take their names from the approximate shape economic data make in graphs during recessions. The letters can also be applied referring to the recoveries.
context_section_description: In a V-shaped recession, the economy suffers a sharp but brief period of economic decline with a clearly defined trough, followed by a strong recovery. V-shapes are the normal shape for recession, as the strength of economic recovery is typically closely related to the severity of the preceding recession.
  A clear example of a v-shaped recession is the Recession of 1953 in the United States.  In the early 1950s the economy in the United States was booming, but because the Federal Reserve expected inflation it raised interest rates, tipping the economy into recession.  In 1953 growth began to slow, in the third quarter, the economy shrank by 2.4 percent.  In the fourth quarter the economy shrank by 6.2 percent, and in the first quarter of 1954 it shrank by 2 percent before returning to growth.  By the fourth quarter of 1954, the economy was growing at an 8 percent pace, well above the trend.  Thus GDP growth for this recession forms a classic v-shape. More importantly, the GDP graph itself has a V shape.
caption: The Recession of 1953 in the United States is a classic V-shape.
    Percent Change From Preceding Period in Real Gross Domestic Product (annualized; seasonally adjusted);   Average GDP growth 1947–2009
  Source: Bureau of Economic Analysis
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