What economic downturn occurred shortly after FDR began to cut government spending, despite initial recovery signs?

The Roosevelt Recession refers to the economic downturn that occurred in 1937-1938, shortly after President Franklin D. Roosevelt began to implement cuts in government spending following early signs of recovery from the Great Depression. This period was characterized by a significant decline in industrial production and rising unemployment, which contradicted expectations of continued economic growth.

The economic policies initiated by Roosevelt, particularly the New Deal programs, initially led to recovery and improvements in the economy. However, as a corrective measure to address budget deficits and rising inflation fears, the government reduced spending, which inadvertently slowed economic momentum and led to the recession. The economic contraction during this time is distinct from the earlier, more prolonged Great Depression, which began with the stock market crash in 1929 and lasted through the early 1930s.

In contrast, the Great Depression was the overarching economic crisis that began in 1929 and led to drastic unemployment and economic hardship. The Panic of 1929 was the immediate market crash that initiated this prolonged period of economic instability. Stagflation, a situation combining stagnant economic growth and high inflation, did not occur until the 1970s, long after the events of the Great Depression and the Roosevelt Recession. Thus, the Roosevelt Recession