ABSTRACT
The recession of 1957–1958 began in August 1957 and ended in May 1958. If economic policies had been promptly changed in May, it would have been too short a lead time for changes to occur in the market economy to prevent the recession from beginning in August. Inflation and unemployment round out the backdrop to the 1957–1958 recession. The restraint was relaxed in the fourth quarter of 1957, as the economy turned downward and inflation lessened. The measure of inflation used here is the consumer price index. The expectation that inflation continues affects the behavior of households and businesses by leading them to “buy now” before prices rise evens more, which of course only fuels the bidding up of prices and further inflation. Employment represents the monthly number of nonfarm civilian jobs based on the payroll records of businesses, not-for-profit organizations, and federal, state, and local governments in the United States.
