The economy in the United States and in Los Angeles The overall U.S. economy had started to contract by the beginning of 2008 and entered the severe phase of the recession during the late summer of that year with the near-collapse of the financial system. By any measure, the cumulative decline in economic activity was large.
Nationally, employment decreased by nearly 9 million, while the unemployment rate climbed from roughly 5 percent to 10 percent. As measured by real gross domestic product (GDP), aggregate economic output contracted 5 percent during the recession, and the purchasing  BIS central bankers’ speeches  1  power of household after-tax income declined by about the same amount.