Unemployment Rate by Year Since 1929 Compared to Inflation and GDP

U.S. Unemployment Rate History

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Updated May 05, 2022
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Animated illustration shows a woman sitting at a desk typing on a keyboard. Text reads: What affects the unemployment rate? The unemployment rate is the percentage of unemployed workers in the labor force. It is a lagging indicator; it may not improve for some time, despite economic recovery. Unemployment rises during recessions and falls during expansions.

The Balance / Julie Bang

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 periods of economic prosperity. The rate also declined during several U.S. wars, particularly during World War II. The unemployment rate rose during the recessions that followed those wars.

Here's how the unemployment rate has changed over time and how it's compared to gross domestic product (GDP) and inflation.

How Unemployment Tracks Recessions

Unemployment tracks the business cycle. Recessions are part of that cycle and can cause high unemployment. Businesses often lay off workers and, without an income, those jobless workers have less money to spend. Lower consumer spending reduces business revenue, which forces companies to cut more payroll. This downward cycle can be devastating to individuals and the economy.

The highest rate of U.S. unemployment was 24.9% in 1933, during the Great Depression. Unemployment remained above 14% from 1931 to 1940. It remained in the single digits until September 1982 when it reached 10.1%. During the Great Recession, unemployment reached 10% in October 2009. In 2020, it reached double digits again at 14.7% in April when the U.S. was dealing with a pandemic and recession.

The Federal Reserve uses expansionary monetary policy to lower interest rates. ​Congress uses fiscal policy to create jobs and provide extended unemployment benefits.

The unemployment rate typically falls during the expansion phase of the business cycle. The lowest unemployment rate in modern history was 1.2% in 1944.

It may seem counterintuitive to think unemployment can get too low, but it can.

The Federal Reserve does not target specific figures for the natural rate of unemployment, but simply seeks "the maximum level of employment" as part of its long-term financial policy goals.

The unemployment rate is a lagging indicator. When an economy begins to improve after a recession, for example, the unemployment rate may continue to worsen for some time. Many companies hesitate to hire workers until they regain confidence in the recovery, and it may take several quarters of economic improvement before they feel confident that the recovery is real.

If you’re looking for work after a recession, you’ll likely find the going is still tough. It might take several months before the unemployment rate falls.

U.S. Unemployment Rates by Year

The ​U.S. Bureau of Labor Statistics (BLS) has measured unemployment since the stock market crash of 1929.

Gross domestic product (GDP) is the measure of economic output by a country. When the unemployment rate is high, there are fewer workers. That could lead to less economic output and a lower rate of GDP.

When inflation rises, the prices of goods and services go up, making them more expensive. If there is a high rate of unemployment at the same time, this could cause issues for those without an income since they may be struggling to afford basic necessities.

The following table shows how unemployment, GDP, and inflation have changed by year since 1929. Unless otherwise stated, the unemployment rate is for December of that year. Unemployment rates for the years 1929 through 1947 were calculated from a different BLS source due to current BLS data only going back to 1948. GDP is the annual rate and inflation is for December of that year and is the year-over-year rate.

Year Unemployment Rate (December) Annual GDP Growth Inflation (December, YOY) Notable Events
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 minimum 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 spending 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 re-elected
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% Minimum 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% 2.6% 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% 6.5% 1.9% U.S. enters Vietnam War
1966 3.8% 6.6% 3.5% Expansion
1967 3.8% 2.7% 3.0% Min wage $1.40
1968 3.4% 4.9% 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 Stagflation; Watergate 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% 2.8% 1.9% JGTRRA
2004 5.4% 3.9% 3.3% Expansion
2005 4.9% 3.5% 3.4% Bankruptcy Abuse Prevention Act; Katrina
2006 4.4% 2.8% 2.5% Expansion
2007 5.0% 2.0% 4.1%  
2008 7.3% 0.1% 0.1% Min. wage $6.55; Financial crisis
2009 9.9% -2.6% 2.7% ARRA; Minimum wage $7.25; Jobless benefits extended
2010 9.3% 2.7% 1.5% Obama tax cuts
2011 8.5% 1.5% 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 = 5% unemployment
2014 5.6% 2.3% 0.8% Unemployment at 2007 levels
2015 5.0% 2.7% 0.7% Natural rate
2016 4.7% 1.7% 2.1% Presidential race
2017 4.1% 2.3% 2.1% Dollar weakened
2018 3.9% 2.9% 1.9% Trump tax cuts
2019 3.6% 2.3% 2.3% Goldilocks economy
2020 6.7% -3.4% 1.4% COVID-19 pandemic and recession
2021 3.9% 5.7% 7.0% COVID-19 pandemic and recovery

Frequently Asked Questions (FAQs)

How is the unemployment rate calculated?

The unemployment rate divides the number of unemployed workers by the total available workforce. In this equation, "unemployed workers" must be age 16 or older and must have been available to work full-time in the past four weeks. They must have actively looked for work during that time frame, as well, and temporarily laid-off workers don't count.

Which state has the highest unemployment rate?

As of March 2022, the District of Columbia and New Mexico had the highest unemployment rates among U.S. states, at 6.0% and 5.3%, respectively. Nebraska had the lowest rate of unemployment, at 2.0%.

Article Sources

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

  2. U.S. Bureau of Labor Statistics. "Top Picks." Select "Unemployment Rate," Click "Retrieve Data," Select "1948 to 2021," Click "Go."

  3. Federal Reserve Bank of St. Louis. "How Monetary Policy Works."

  4. U.S. Bureau of Labor and Statistics. "Labor Force Statistics from the Current Population Survey: Employment Status of the Civilian Noninstitutional Population."

  5. Board of Governors of the Federal Reserve System. "Statement on Longer-Run Goals and Monetary Policy Strategy."

  6. U.S. Bureau of Labor Statistics. “Consumer Price Index Database, All Urban Consumers.” Select “U.S. City Average, All items,” Select "Retrieve Data," Select “More Formatting Options,” Uncheck "Original Data Value," Select “12-Month Percent Change," Select "Specify Year Range: 1929 to 2021," Select "Retrieve Data."

  7. Bureau of Economic Analysis. “National Income and Product Accounts Tables." Select "Table 1.1.1: Percent Change From Preceding Period in Real Gross Domestic Product.” Select "Modify," select "Annual," select "1930 A" as "First Year."

  8. U.S. Bureau of Labor Statistics. "Unemployment Rates for States."

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What Is Unemployment?