in

Historical U.S. Unemployment Rate by Year

Historical U.S. Unemployment Rate by Year
Announcement


The U.S. unemployment rate—the percentage of the labor force without a job, but able to work and actively searching for it—is one of the key indicators of the overall health of the nation’s economy. Since the Great Depression, the unemployment rate has shifted in response to policy changes, historical events at home and worldwide, and economic developments.

Announcement

Key Takeaways

  • The U.S. unemployment rate is the percentage of the labor force without a job, but able to work and actively searching for work.
  • The unemployment rate is calculated monthly by the U.S. Bureau of Labor Statistics (BLS), a division of the Department of Labor.
  • The BLS surveys 60,000 households each month, selected by random sampling to approximate the nation’s population, to calculate unemployment figures.
  • Unemployment rates change in response to global and macroeconomic events, policies, recessions, expansions, and more.

What Is the Unemployment Rate?

The unemployment rate is the percentage of the labor force without a job. Specifically, it is a measurement of the percentage of people of working age who aren’t working, but are otherwise available and looking for work.

It reflects the business cycle and tends to rise during recessions and fall during economic expansions. As economic growth occurs, more production happens in general, and more workers across industries are needed to produce additional goods and services. The opposite tends to be true during difficult economic periods.

A division of the U.S. Department of Labor known as the Bureau of Labor Statistics (BLS) calculates the unemployment rate by conducting a monthly survey of 60,000 households selected by random sampling to closely approximate the full population of the country. The sampling divides counties and cities in the United States into 2,000 units, then the Census Bureau selects a group of roughly 800 of these geographic areas for surveying.

Surveyors call selected households and ask questions about their work or work-seeking behaviors over a particular reference week. The BLS then extrapolates nationwide data from these results and reports the total number of employed and unemployed people for the previous month, as well as characteristics about them, and the unemployment rate is expressed as a percentage.

U.S. Unemployment Rate as of September 2023

The most recently available unemployment figure for September 2023, when unemployment was 3.8%.

What Affects the Unemployment Rate?

The BLS has measured unemployment since the stock market crash of 1929. Since that time, global events including World War II, the Korean War, and the Cuban Missile Crisis all exerted an influence on unemployment. During periods of war, a surge in military spending often leads to increases in output and employment, and the unemployment rate drops. More recently, the COVID-19 pandemic caused a sharp spike in unemployment.

Another factor affecting unemployment is macroeconomic activity and fiscal policy. Policymakers can employ both demand- and supply-side policy in an effort to reduce the cyclical nature of unemployment. Periods of recession (or depression) and expansion exert some of the largest forces on employment rates.

Note that the participation rate is a similar metric to the unemployment rate, although the two provide different information. The participation rate is a measurement of the percentage of all Americans in the labor force.

Below are historic unemployment rates for the month of December in years dating back to 1929. While there are myriad factors influencing unemployment rates, we’ve included an example of a particularly important variable or event in most years.

U.S. Unemployment Rates by Year
Year Unemployment Rate (December) Notable Factor or Event
1929 3.2% Market crash
1930 8.7% Smoot-Hawley
1931 15.9% Dust Bowl
1932 23.6% Hoover’s tax hikes
1933 24.9% FDR’s New Deal
1934 21.7% Depression eased
1935 20.1% N/A
1936 16.9% N/A
1937 14.3% Spending cuts
1938 19.0% FLSA started minimum wage
1939 17.2% Drought ended
1940 14.6% U.S. draft
1941 9.9% Pearl Harbor
1942 4.7% Defense spending tripled
1943 1.9% Germany surrendered at Stalingrad
1944 1.2% Bretton Woods
1945 1.9% World War II ended; minimum wage: 40 cents
1946 3.9% Employment Act
1947 3.6% Marshall Plan negotiated
1948 4.0% Truman reelected
1949 6.6% Fair Deal; NATO
1950 4.3% Korean War; minimum wage: 75 cents
1951 3.1% Expansion
1952 2.7% Expansion
1953 4.5% Korean War ended
1954 5.0% Dow returned to 1929 level
1955 4.2% Unemployment fell
1956 4.2% Minimum wage: $1
1957 5.2% Recession
1958 6.2% N/A
1959 5.3% Expansion
1960 6.6% Recession
1961 6.0% JFK takes office; minimum wage: $1.15
1962 5.5% Cuban Missile Crisis
1963 5.5% LBJ takes office; minimum wage: $1.25
1964 5.0% Tax cut
1965 4.0% U.S. entered Vietnam War
1966 3.8% Expansion
1967 3.8% Minimum wage: $1.40
1968 3.4% Minimum wage: $1.60
1969 3.5% Nixon took office
1970 6.1% Recession
1971 6.0% Emergency Employment Act; wage-price controls
1972 5.2% Ongoing stagflation; Watergate
1973 4.9% CETA; gold standard; Vietnam War ended
1974 7.2% Nixon resigned; minimum wage: $2
1975 8.2% Recession ended
1976 7.8% Expansion
1977 6.4% Carter took office
1978 6.0% Fed raised rate to 20% to stop inflation
1979 6.0% N/A
1980 7.2% Recession
1981 8.5% Reagan took office; Reagan tax cuts; minimum wage: $3.35
1982 10.8% Job Training Partnership Act; Garn-St. Germain Act
1983 8.3% Reagan increased military spending
1984 7.3% N/A
1985 7.0% Expansion
1986 6.6% Tax cuts
1987 5.7% Black Monday
1988 5.3% Fed raised rates
1989 5.4% George H.W. Bush took office; reforms made to address S&L Crisis
1990 6.3% Recession
1991 7.3% Desert Storm; minimum wage: $4.25
1992 7.4% NAFTA drafted
1993 6.5% Clinton took office; Omnibus Budget Reconciliation Act
1994 5.5% School to Work Act
1995 5.6% Expansion
1996 5.4% Welfare reform
1997 4.7% Minimum wage: $5.85
1998 4.4% LTCM crisis
1999 4.0% Euro; Serbian airstrike
2000 3.9% Nasdaq hit record high
2001 5.7% George W. Bush took office; Bush tax cuts; 9/11 attacks
2002 6.0% War on Terror
2003 5.7% JGTRRA
2004 5.4% Expansion
2005 4.9% Bankruptcy Abuse Prevention Act; Hurricane Katrina
2006 4.4% Expansion
2007 5.0% N/A
2008 7.3% Minimum wage: $6.55; financial crisis
2009 9.9% Obama took office; ARRA; minimum wage: $7.25; jobless benefits extended
2010 9.3% Obama tax cuts
2011 8.5% 26 months of job losses by July; debt ceiling crisis; Iraq War ended
2012 7.9% QE; 10-year rate at 200-year low; fiscal cliff
2013 6.7% Stocks up 30%
2014 5.6% Unemployment at 2007 levels
2015 5.0% Natural rate
2016 4.7% Presidential race
2017 4.1% Trump took office; dollar weakened
2018 3.9% Trump tax cuts
2019 3.6% Goldilocks economy
2020 6.7% Pandemic and recession
2021 3.9% Pandemic and recovery; Biden took office
2022 3.5% Continued recovery

Source: U.S. Bureau of Labor Statistics

Announcement

Unemployment Rate, Recessions, and Expansions

Unemployment is countercyclical relative to economic activity. This means that in periods of economic slowdown, such as a recession or a depression, unemployment increases. On the other hand, during periods of high economic activity or expansion, unemployment decreases.

When the economy is faltering, demand for and production of goods and services drop. Businesses may either no longer need to employ the same number of workers to meet production needs, or they may not be able to afford to maintain employee levels, or a combination of both. As a result, they may reduce their workforce. However, businesses may cut back hours, reduce pay, or take other measures before laying off workers, resulting in a lag between an economic downturn and increasing unemployment.

When economic activity picks up, there is also often a period of time before this will be reflected in decreasing unemployment rates. Businesses may attempt to achieve higher production rates with the same number of employees to keep costs down before resorting to hiring additional employees.

What Is the Highest Unemployment Rate in U.S. History?

The highest rate of unemployment since the BLS began calculating these figures was 24.9% in 1933, during the Great Depression.

What Is the Lowest Unemployment Rate in U.S. History?

The lowest monthly unemployment rate in U.S. history is 0.8% in October 1944, toward the end of World War II.

Announcement

The Bottom Line

The U.S. unemployment rate has been tabulated monthly since 1929 by the U.S. Bureau of Labor Statistics (BLS). It is a measurement of the percentage of an eligible workforce that isn’t currently working, but is actively searching for work.

The unemployment rate is a key measure of the overall well-being of an economy. It responds to changes in policy, periods of economic growth or contraction, and global events such as wars or pandemics.



Source link

Announcement

What do you think?

Written by

Announcement
Announcement

Leave a Reply

Your email address will not be published. Required fields are marked *

Announcement
Rand Paul Fast Facts | CNN Politics

Rand Paul Fast Facts | CNN Politics

This Week In Entertainment February 10, 2024

This Week In Entertainment February 10, 2024