The unemployment rate has varied from 1% during World War I to 25% during the Great Depression. Unemployment tends to increase during recessions and to decrease during expansions. Unemployment is not at its lowest level in 50 years, but only by a narrow margin. It has only fallen below its current rate of 3.6% three times since 1972 and only by 0.1 percent.
While that means that the statement is not entirely accurate, unemployment is close to historic lows of the past. The Federal Reserve does not point to specific figures for the natural rate of unemployment, but simply seeks the maximum level of employment as part of its long-term financial policy objectives. The economic instability following the terrorist attacks of September 11, 2001 helped to drive the rise in the unemployment rate. During the first year of Nixon's presidency, unemployment was relatively low (about 3.5 percent), but in 1970, in the midst of a mild recession, unemployment rose again to levels similar to those of much of the Kennedy era (about 5.5 percent).
If at the same time there is a high unemployment rate, this could cause problems for those who have no income, as they may have difficulty paying for their basic needs. Subsequently, the COVID-19 pandemic caused this historically low rate to expand to its highest level since the 1930s (although unemployment was calculated differently in the mid-20th century). The unemployment rate trends of LBJ and Clinton are the only two since World War II that show a steady decline and not an uptick. For the first time since World War II, unemployment exceeded 10 percent in November 1982 (it reached 10.8 percent).
In another recession that began in 1973 and lasted until 1975, unemployment reached a new record after World War II, of 9 percent. Here's how the unemployment rate has changed throughout history and how it has compared to gross domestic product (GDP) and inflation. Like Johnson, Clinton held office during a period in which the unemployment rate declined steadily during his presidency, reflecting a strong economy. While the overall picture seems bleak, the unemployment rate has reached some of its lowest levels in United States history, representing a notable recovery from the height of the COVID-19 pandemic, which left an almost record number of people out of work.
Unemployment rates for the years 1929 to 1947 were calculated from a source other than the BLS, because current BLS data only date back to 1948. This graph shows the same data ordered by the lowest average unemployment rate (Johnson) and the highest (Ford) average unemployment rate. While the reduction in unemployment can be seen as a sign of strength, leaders are still looking for clues on how to revive the country's economic growth. During the first two and a half years of Carter's presidency, the unemployment rate improved slowly due to a constant improvement, but the 1979 energy crisis, together with the increase in oil prices that accompanied it, caused unemployment to rise again to just under 8 percent.
Leave a Comment