Unemployment Rate by Year Since 1929 Compared to Inflation and GDP

U.S. Unemployment Rate History

apples being sold to unemployed people during the Great Depression
••• Interim Archive / Getty Images

The unemployment rate is the percentage of unemployed workers in the labor force. It's a key indicator of the health of the country's economy. Unemployment typically rises during recessions and falls during prosperity, and it also has declined during five U.S. wars, especially World War II,. rising again in the recessions that followed those wars.

A Key Economic Indicator

The highest rate of U.S. unemployment was 24.9% in 1933, during the Great Depression. Unemployment was more than 14% from 1931 to 1940. Unemployment remained in the single digits until 1982 when it reached 10.8%. The annual unemployment rate reached 9.9% in 2009, during the Great Recession.

The lowest unemployment rate was 1.2% in 1944. It may seem counterintuitive to think unemployment can't get too low, but it can. 

Even in a healthy economy, there always should be a natural rate of unemployment

People move before they get a new job or are getting retrained for a better job. Others have just started looking for work and are waiting until they find just the right job. Even when the unemployment rate is 4%, it's difficult for companies to expand because they have a hard time finding good workers.

Unemployment swings tend to coincide with the business cycle, in that slow growth causes high unemployment. Naturally, as gross domestic product declines, businesses lay off workers and jobless workers have less to spend as a result; this feeds into the cyclical relationship between unemployment and the economy. Lower consumer spending reduces business revenue, which forces companies to cut more payroll to reduce their costs; this downward cycle can be devastating.

Keep in mind that the unemployment rate is a lagging indicator, meaning it continues to worsen even after economic growth improves. If you’re applying for jobs in a time of bad economic growth, know that companies remain hesitant to hire back workers until they are sure that growth is on a stable upward trend.

When the unemployment rate reaches 6%, the government steps in in the following ways:

  • The Federal Reserve uses expansionary monetary policy and lowers the federal funds rate.
  • If unemployment continues, ​Congress uses fiscal policy, directly creating jobs for public works projects.
  • They also can stimulate demand by providing extended unemployment benefits.

U.S. Unemployment Rates Year by Year

The ​U.S. Bureau of Labor Statistics has measured unemployment since the stock market crash of 1929, and the following table shows how it has changed year by year along with other factors:

Year Avg. Unemployment Rate GDP Growth Inflation (Dec. YOY) What happened
1929

3.2%

NA 0.6% Market crash
1930 8.7% -8.5% -6.4% Smoot-Hawley
1931

15.9%

-6.4% -9.3% Dust Bowl

1932

23.6% -12.9% -10.3% Hoover's tax hikes

1933

24.9% -1.2% 0.8% FDR's New Deal

1934

21.7% 10.8% 1.5% Depression eased thanks to New Deal

1935

20.1% 8.9% 3.0%  

1936

16.9% 12.9% 1.4%  

1937

14.3% 5.1% 2.9% Spending cuts

1938

19.0% -3.3% -2.8% FLSA starts min wage

1939

17.2% 8.0% 0% Drought ended

1940

14.6% 8.8% 0.7% U.S. draft

1941

9.9% 17.7% 9.9% Pearl Harbor

1942

4.7% 18.9% 9.0% Defense tripled

1943

1.9% 17.0% 3.0% Germany surrendered at Stalingrad

1944

1.2% 8.0% 2.3% Bretton Woods

1945

1.9% -1.0% 2.2% War ends. Min wage $0.40

1946

3.9% -11.6% 18.1% Employment Act

1947

3.6% -1.1% 8.8% Marshall Plan negotiated

1948

4.0% 4.1% 3.0% Truman reelected

1949

6.6% -0.6% -2.1% Fair Deal; NATO

1950

4.3% 8.7% 5.9% Korean War; Min wage $0.75

1951

3.1% 8.0% 6.0% Expansion

1952

2.7% 4.1% 0.8% Expansion

1953

4.5% 4.7% 0.7% Korean War ended

1954

5.0% -0.6% -0.7% Dow returned to 1929 level

1955

4.2% 7.1% 0.4% Unemployment fell
1956 4.2% 2.1% 3.0% Min wage $1.00
1957 5.2% 2.1% 2.9% Recession
1958 6.2% -0.7% 1.8%  
1959 5.3% 6.9% 1.7% Expansion
1960 6.6% 2.6% 1.4% Recession

1961

6.0% 2.3% 0.7% JFK; Min wage $1.15
1962 5.5% 6.1% 1.3% Cuban Missile Crisis
1963 5.5% 4.4% 1.6% LBJ; Min wage $1.25
1964 5.0% 5.8% 1.0% Tax cut
1965 4.0% 6.4% 1.9% US enters Vietnam War
1966 3.8% 6.5% 3.5% Expansion
1967 3.8% 2.5% 3.0% Min wage $1.40
1968 3.4% 4.8% 4.7% Min wage $1.60

1969

3.5% 3.1% 6.2% Nixon took office
1970 6.1% -0.2% 5.6% Recession
1971 6.0% 3.3% 3.3% Emergency Employment Act; Wage-price controls

1972

5.2% 5.3% 3.4% Ongoing StagflationWatergate break-in
1973 4.9% 5.6% 8.7% CETA; Gold standard; Vietnam War ended
1974 7.2% -0.5% 12.3% Nixon resigns; Min. wage $2.00
1975 8.2% -0.2% 6.9% Recession ended
1976 7.8% 5.4% 4.9% Expansion
1977 6.4% 4.6% 6.7% Carter took office
1978 6.0% 5.5% 9.0% Fed raised rate to 20% to stop inflation

1979

6.0% 3.2% 13.3%  

1980

7.2%

-0.3%

12.5%

Recession

1981

8.5%

2.5%

8.9%

Reagan tax cuts; Min. wage $3.35

1982

10.8% -1.8% 3.8% Job Training Partnership Act; Garn-St.Germain Act
1983 8.3% 4.6% 3.8% Reagan increased military spending
1984 7.3% 7.2% 3.9%  
1985 7.0% 4.2% 3.8% Expansion
1986 6.6% 3.5% 1.1% Tax cuts
1987 5.7% 3.5% 4.4% Black Monday
1988 5.3% 4.2% 4.4% Fed raised rate
1989 5.4% 3.7% 4.6% Reforms made to address S&L Crisis
1990 6.3% 1.9% 6.1% Recession
1991 7.3% -0.1% 3.1% Desert Storm; Min. wage $4.25
1992 7.4% 3.5% 2.9% NAFTA drafted
1993 6.5% 2.8% 2.7% Omnibus Budget Reconciliation Act
1994 5.5% 4.0% 2.7% School to Work Act 
1995 5.6% 2.7% 2.5% Expansion
1996 5.4% 3.8% 3.3% Welfare reform
1997 4.7% 4.4% 1.7% Min. wage $5.85
1998 4.4% 4.5% 1.6% LTCM crisis
1999 4.0% 4.8% 2.7% Euro. Serbian airstrike
2000 3.9% 4.1% 3.4% NASDAQ hit record high

2001

5.7% 1.0% 1.6% Bush tax cuts; 9/11 attacks
2002 6.0% 1.7% 2.4% War on Terror
2003 5.7% 2.9% 1.9% JGTRRA
2004 5.4% 3.8% 3.3% Expansion
2005 4.9% 3.5% 3.4% Bankruptcy Abuse Prevention Act; Katrina
2006 4.4% 2.9% 2.5% Expansion
2007 5.0% 1.9% 4.1% EU became #1 economy
2008 7.3% -0.1% 0.1% Min. wage $6.55; Financial crisis
2009 9.9% -2.5% 2.7% ARRA; Min. wage $7.25; Jobless benefits extended
2010 9.3% 2.6% 1.5% Obama tax cuts
2011 8.5% 1.6% 3.0% 26 months of job losses by July; Debt ceiling crisis; Iraq War ended
2012 7.9% 2.3% 1.7% QE; 10-year rate at 200-year low; Fiscal cliff
2013 6.7% 1.8% 1.5% Stocks up 30%; Long term = 50%  unemployed
2014 5.6% 2.5% 0.8% Unemployment at 2007 levels
2015 5.0% 2.9% 0.7% Natural rate
2016 4.7% 1.6% 2.1% Presidential race
2017 4.1% 2.2% 2.1% Dollar weakened
2018 3.9% 2.9% 1.9% Trump tax cuts
  • Average Unemployment 1929-1939
  • Current Unemployment Rates
  • GDP Growth Rate
  • Inflation Rates Since 1913

Article Sources

  1. Federal Reserve Bank of St. Louis. "How Monetary Policy Works," Accessed Oct. 2, 2019.


  2. Bureau of Labor Statistics. "Labor Force, Employment, and Unemployment, 1929-39: Estimating Methods," Page 2, Table 1. Accessed Oct. 2, 2019.


  3. Bureau of Labor Statistics. "Labor Force Statistics from the Current Population Survey," Accessed Oct. 2, 2019.


  4. The World Bank. "GDP Growth (Annual %) - United States," Accessed Oct. 2, 2019.


  5. Official Data Foundation. "USD Inflation since 1913," Accessed Oct. 2, 2019.