The New Deal was a series of economic programs and policies implemented by President Franklin D. Roosevelt in the 1930s to combat the effects of the Great Depression. One of the major events of this era was a dramatic decline in employment in late 1937, which is commonly known as the "Roosevelt Recession."
There were several factors that contributed to this decline in employment. Firstly, the government had pursued policies to reduce the federal budget deficit, which included reducing spending on public works projects and agricultural subsidies. This resulted in a reduction in government spending, which in turn led to a decrease in demand for goods and services, and subsequently, a decline in employment.
Secondly, the Federal Reserve had tightened monetary policy by raising interest rates and increasing reserve requirements for banks, which reduced the amount of credit available in the economy. This made it harder for businesses to borrow money to invest and expand, and thus led to a contraction in economic activity and a decline in employment.
Lastly, there were also external factors that contributed to the decline in employment, such as a severe drought that hit the Midwest and reduced agricultural output, as well as a wave of strikes that disrupted production in several key industries.
In summary, the decline in employment in late 1937 was caused by a combination of factors, including a reduction in government spending, tightening of monetary policy, and external factors such as the drought and strikes. These factors all contributed to a contraction in economic activity and a decline in employment, which marked a setback in the ongoing recovery from the Great Depression.
