The stock market crashed in 2008 because too many had people had taken on loans they couldn’t afford. Lenders relaxed their strict lending standards to extend credit to people who were less than qualified. This drove up housing prices to levels that many could not otherwise afford. The 2008 stock market crash took place on Sept. 29, 2008, when the Dow Jones Industrial Average fell 777.68 points. This was the largest single-day loss in Dow Jones history up to this point. It came on the heels of Congress’ rejection of the bank bailout bill. Congress eventually passed the bailout bill in October, but the damage was done. The Labor Department reported big job losses across the board as the Dow Jones continued its downward spiral.

Effects of the 2008 Market Crash
The economy continued to lose hundreds of thousands of jobs, and the unemployment rate peaked at 10 percent, double the December 2007 national unemployment rate of 5 percent. Between late 2007 and mid-2009, the period widely referred to as the “Great Recession,” the economy lost nearly 8.7 million jobs. Consumers cut spending to a level not seen since World War II. Many experienced a sharp decline in retirement savings, which compounded unemployment and housing instability.