Comparison of Unemployment Rate to Inflation and GDP Since 1929

Updated : February 18th, 2021

When it comes to the unemployment rate in America, it is based on the percentage of the total unemployed labor force throughout the country. This helps in reviewing the country’s economy through the years. With this, we understand that unemployment rises during recessions and falls on the rebound. You should know that unemployment declined during the 5 US wars and mainly during World War II. But quickly after the wars ended, there was a spike in recession. During the Great Depression, America faced its highest rate of US unemployment at 24.9 percent in 1933. While in 1931 to 1940, unemployment was more than 14 percent and remained in single digits till 1982 when it rose to 10.8 percent. It was during the Great Recession of 2009 that the annual unemployment rate reached 9.9 percent in 2009.

Comparison of Unemployment Rate to Inflation and GDP

You should know that the lowest unemployment rate was 1.2 percent in 1944. But, you should know that unemployment can get lower based on economic policies and the outcome of companies gaining a foothold in new countries. This means that for a healthy economy, there should be a natural rate of unemployment that should follow.
This is usually because people move before they settle down in their new job. Otherwise, they get retained for a better job or stay unemployed and look out for work and wait for the right job. Even when the unemployment rate is 4 percent, it can be tough for companies to expand since they would have a hard time recruiting new good workers.



Unlike previous years, unemployment is now at a 44 year low at just 4.1% with several proactive measures brought in to ensure a higher minimum wage and employment opportunities for all.

Since unemployment cycles coincide with business cycles, job employment solely depends on whether there are enough good candidates to fill these vacancies. You should know that slow growth hampers employment and in fact causes high unemployment. With the decline in the gross domestic product, businesses will have to lay off workers. This will make jobless workers spend less. Now with lower consumer spending, there is a significant reduction in business revenue in this time period. This forces several companies to make more payroll cuts to reduce their costs and the downward cycle on workers is simply devastating.

Remember that unemployment rate is used as a lagging indicator. What this means is that it continues to worsen even as economic growth improves. Companies are hesitant about hiring workers back only when there are sustainable growth and a stable upward trend. That means that when the unemployment rate reaches 6 percent, the government will have to step in. Based on the turn of events the Federal Reserve uses expansionary monetary policy and will lower the federal funds rate. When the unemployment continues, Congress will step in to use its fiscal policy. It can create jobs for public work projects. It can also stimulate demand by providing extended unemployment benefits. The main way to ensure a healthy economic growth rate is by ensuring that there is a steady increase by 2-3% to create 150,000 jobs.

Just so you know! There are only two ways to get a country back on track.

Countries either choice the usual route of a monetary policy which is a quick fix where money is pumped in to drive growth. Otherwise, the more difficult fiscal policy is used to stimulate the economy with tax spends.

Monetary policy is usually the first solution for a quick and effective method. A lower interest rate will make it easier for families to borrow and solve their needs. This includes items like homes, cars, and electronics. It will stimulate enough demand to put the economy back on track. With a lower interest rate, your business can borrow at a lesser rate. This allows them the capital to hire more workers to meet the growing demand.

If all measures under this stimulus fail then it will mean that the government needs to make rate cuts and feed the economy with increased taxes to boost businesses. This helps businesses make more money from people that buy into their products once they have the disposable income to make their purchases.

A second method is by using the Fiscal policy. This is done by increasing or cutting taxes to stimulate the economy. With an expansionary fiscal policy, there will be a slower time for it to come into effect. Both Congress and the President have to agree on the next steps that follow. This can be more effective when it is executed. This will give the government some teeth to turn things around. The main thing is to gain the confidence of the people by convincing them of a better future. Cutting taxes works in the same manner as reducing interest rates. Both help businesses and consumers to spend more. This increase in demand will provide businesses with more money to invest and hire more workers. Government spending usually takes the form of creating jobs. When the government hires employees, they can do so directly or with contracts through companies to provide services. This provides customers with cash to buy more essential products.

In order to best judge the situation across the length and breadth of the US, you should weigh the unemployment rate against GDP growth and inflation. You will find a table below representing unemployment since 1929 when the stock market crashed. This table compares the unemployment rate, GDP growth, and inflation.

U.S. Unemployment Rate Over The Last 89 Years

Year Unemployment Rate GDP Growth Inflation
1929 3.2% NA 0.6%
1930 8.7% -8.5% -6.4%
1931 15.9% -6.4% -9.3%
1932 23.6% -12.9% -10.3%
1933 24.9% -1.3% 0.8%
1934 21.7% 10.8% 1.5%
1935 20.1% 8.9% 3.0%
1936 16.9% 12.9% 1.4%
1937 14.3% 5.1% 2.9%
1938 19.0% -3.3% -2.8%
1939 17.2% 8.0% 0%
1940 14.6% 8.8% 0.7%
1941 9.9% 17.7% 9.9%
1942 4.7% 18.9% 9.0%
1943 1.9% 17.0% 3.0%
1944 1.2% 8.0% 2.3%
1945 1.9% -1.0% 2.2%
1946 3.9% -11.6% 18.1%
1947 3.9% -1.1% 8.8%
1948 4% 4.1% 3.0%
1949 6.6% -0.5% -2.1%
1950 4.3% 8.7% 5.9%
1951 3.1% 8.1% 6.0%
1952 2.7% 4.1% 0.8%
1953 4.5% 4.7% 0.7%
1954 5% -0.6% -0.7%
1955 4.2% 7.1% 0.4%
1956 4.2% 2.1% 3.0%
1957 5.2% 2.1% 2.9%
1958 6.2% -0.7% 1.8%
1959 5.3% 6.9% 1.7%
1960 6.6% 2.6% 1.4%
1961 6% 2.6% 0.7%
1962 5.5% 6.1% 1.3%
1963 5.5% 4.4% 1.6%
1964 5% 5.8% 1.0%
1965 4% 6.5% 1.9%
1966 3.8% 6.6% 3.5%
1967 3.8% 2.7% 3.0%
1968 3.4% 4.9% 4.7%
1969 3.5% 3.1% 6.2%
1970 6.1% 0.2% 5.6%
1971 6% 3.3% 3.3%
1972 5.2% 5.2% 3.4%
1973 4.9% 5.6% 8.7%
1974 7.2% -0.5% 12.3%
1975 8.2% -0.2% 6.9%
1976 7.8% 5.4% 4.9%
1977 6.4% 4.6% 6.7%
1978 6% 5.6% 9.0%
1979 6% 3.2% 13.3%
1980 7.2% -0.2% 12.5%
1981 8.5% 2.6% 8.9%
1982 10.8% -1.9% 3.8%
1983 8.3% 4.6% 3.8%
1984 7.3% 7.3% 3.9%
1985 7% 4.2% 3.8%
1986 6.6% 3.5% 1.1%
1987 5.7% 3.5% 4.4%
1988 5.3% 4.2% 4.4%
1989 5.4% 3.7% 4.6%
1990 6.3% 1.9% 6.1%
1991 7.3% -0.1% 3.1%
1992 7.4% 3.6% 2.9%
1993 6.5% 2.7% 2.7%
1994 5.5% 4.0% 2.7%
1995 5.6% 2.7% 2.5%
1996 5.4% 3.8% 3.3%
1997 4.7% 4.5% 1.7%
1998 4.4% 4.5% 1.6%
1999 4% 4.7% 2.7%
2000 3.9% 4.1% 3.4%
2001 5.7% 1.0% 1.6%
2002 6% 1.8% 2.4%
2003 5.7% 2.8% 1.9%
2004 5.4% 3.8% 3.3%
2005 4.9% 3.3% 3.4%
2006 4.4% 2.7% 2.5%
2007 5.0% 1.8% 4.1%
2008 7.3% -0.3% 0.1%
2009 9.9% -2.8% 2.7%
2010 9.3% 2.5% 1.5%
2011 8.5% 1.6% 3.0%
2012 7.9% 2.2% 1.7%
2013 6.7% 1.7% 1.5%
2014 5.6% 2.6% 0.8%
2015 5.0% 2.9% 0.7%
2016 4.7% 1.5% 2.1%
2017 4.1% N.A. N.A.

US Inflation Rate

When it comes to the inflation rate, it is the percentage change in prices from one year to the next. These changes result in a business cycle. The first phase is the expansion where growth is positive and the country can see a 2% inflation. When the economy expands beyond 3 percent, it will create an asset bubble. The second phase is the peak when the expansion ends and contraction begins. Well in the third phase, you will find a contraction which results in a recession. Inflation usually falls below 2.0 percent and then deflation looms. The fourth phase is called the trough and this is the month when the contraction ends and the expansion begins. You should know that inflation responds to monetary policy that is enacted by the Federal Reserve. The Federal Reserve will focus its attention on the core inflation rate and will exclude things like volatile gas and food prices. The Fed sets a target inflation rate of two percent. If the core rate rises much above that, the Fed will execute a contracting monetary policy which increases interest rates and shuts down demand and thereby lowers prices.

US Records 10 Years with 3 percent growth

US unemployment

For a record 10 straight years, the United States has had 3 percent growth in Gross Domestic Product based on data by the Bureau of Economic Analysis. In 85 years since the BEA’s existence, the annual change in real GDP there was only one ten-year stretch between 2006 to 2015. This is because real annual growth in GDP peaked in 2006 at 2.7 percent. After which it has never been this high again. The last recession ended in June 2009. In 6 calendar years from 2010 to 2015, real annual GDP growth has never exceeded the 2.5 percent it reached in 2010. The longest consecutive stretch of years in which the US saw real growth by 3 percent or better was a seven-year period between 1983 to 1989. The second longest period was a growth of 3 percent between 1939 to 1944 during World War II. In the last two years, annual growth has been stagnant at 2.44 percent. In the fourth quarter from 2016 to 2018, it is projected to grow only by 2.7, 2.5 and 2.4 percent.

This primarily means that a steady growth rate of 3 percent is good for the economy. But, unless there is higher growth the economy will tend to stagnate and the number of jobs that are open for new faces will not grow significantly and this will create a problem if the number of new openings does not increase year-on-year, the unemployment rate does not fall further. If it depends solely on government policy through correction to make America continue its growth trajectory which does not rely solely on government jobs and contracts.



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  1. I was fired through no fault of my own in the state of NJ. I was hired to help build an apparel startup. Hired for coming from a corporate background, I would make my professional suggestions on how to improve and develop product as that type of information was always welcomed but unfortunately not utilized. During my time, I’ve repeatedly tried to help the company to avoid costly mistakes in the future when it came to producing apparel, yet my boss preferred to always “wing it” change direction and never follow any type of calendared process. Fast forward and to no surprise to me there is an issue with production and I’m informed with vague information and so as a professional, I remind the owners (again) of the proper protocol that I’ve been suggesting and believing that they finally understood this now. But the understanding was an awakening that was too late (as it seems). Therefore a week later, I was fired as a cut in finances, With no severance, I ask for a confirmation on days worked in order to claim for unemployment due to the financial reduction but then am emailed that due to my decision making that the company lost thousands of dollars and that I didn’t perform my job. I continued to apply for my claim and was denied with allegations that in addition to losing thousands of dollars that I now stole candy (of all things) from the company under footage which is false, and that I watched movies on my phone which was also a false claim. The adjudication office has reached out to me to give me 2 days to reply against the ridiculous allegations and I have replied to all her points of accusations. I had also added more information which I regret now because I was a bit emotional because of the low blows that came my way. Nevertheless, the email had been sent and I am now waiting to see the next steps.
    My question is this. In the state of NJ, what are the next steps for determination?
    Will my former employer read my comments which will only add fuel to the fire (which is true on the additional emotional writing) and then create more lies?
    Have employers gotten away with denying claims by creating false claims?
    This is not what I had expected nor planned to rebuttal in an adjudication.
    I only wanted unemployment pay while I continue to look for work.

  2. I went on medical leave in 2016. I had 2 years of approved leave with pay and benefits. Over the past 2 years, I continued on medical. In May of 2018 my employer tried to terminate for refusing to follow the company doctor’s recommendation to return to work with restrictions in a non hazardous area. I was never informed of where to report or when to report for work. I didn’t even know of the attempted termination until I didn’t receive my bi-weekly payment. I filed a greviance to get my job, pay, and benefits back and was awarded a temporary re-instatement until I had a third party doctor exam. During all of this, I reached my 2 year limit on pay and benefits. Once the 3rd party medical exam was done, the doctor sided with me that there were health reasons for not restoring me to my previous position. But he also agreed with my employer’s company doctor offer of returning to work with restrictions in a non hazardous area. My employer informed me at that time they had no jobs available for me. Since I no longer receive pay or benefits I filed for unemployment. The state said that my employer objected to my request for umeployment on the grounds that I’m weeking fulltime for them and now it has been 6 weeks pending adjudication. I receive no pay no benefits and was told I don’t have a job from my employer. How can they hold up my unemployment pay?

    1. Gil,

      Thank you for writing to us. The outcome of the adjudication depends on the paperwork/documents you submit supporting your stance. Please make sure to prepare well and argue confidently in your favor.

  3. I live in the state of Nevada and had filed for unemployment a few months back in June and was denied because of not earning enough funds in that quarter which show that I’m trying to open a claim on a previous claim considered double dipping. I was told that if I worked and made $1,200 then that would be enough to fulfill and be approved for unemployment claim for the new quarter. I did work a new job started the job as a project assistant for a plumbing company to which the hiring manager knew I had never worked in plumbing but had over 20 years in construction. All in all I worked really hard to understand the plumbing industry but I could never satisfy my supervisors expectations and the last week of me working she basically took ball work from me and kept saying she will handle it even though I would ask every hour or less if there is something that I could do, she kept denying me any work because she was frustrated that I couldn’t do the job is good as she did even though she’s been there for 30 years. I was receiving unemployment funds for the past 3 weeks and suddenly I have to wait till November 2nd for an adjudication meeting and my funds have been placed on hold until then. Can my claim be denied because I could not do the job she expected even though she hired me knowing my previous experience? What should I expect now?

    1. Brooke,

      There is a thin line. It can go against your since expectations were not met or it can also be in your favor for unreasonable demands from your supervisor. If you think you have a strong case, make sure to argue well and present all supporting paperwork.

  4. The state of Oregon UI told my spouse every claim that isn’t due to lack of work now goes through adjudication! Is that true or are they just saying that because she ‘resigned en leiu of termination’ in her trial period? She worked for the state, and didn’t want to be unable to find employment in another department.

    1. Ambrose,

      I don’t know if this is true. How can you confirm? By calling the office again and asking for a different representative to speak to.

    2. Yes, this is true, Oregon will adjudicate any “employment separation” that isn’t due to a lack of work. FYI they’ll also treat a resignation in lieu of termination as her being fired because if your wife’s employer told her “quit or you’ll be fired”, she didn’t really have much of a choice and she was going to lose her job either way.

  5. I was terminated while on Workers Comp. The employer didn’t call me, I was notified a month after the fact by the insurance carrier for the employer! And get this,,,When I opened my UI case to start benefit payments, I notated in the questionnaire that I have a lifting restriction imposed by the Doctor but that I can still physically work and I’m currently available to work….and I was denied UI benefits.
    I’m appealing.

    1. Will,

      I think you should be eligible to collect UI benefits under such circumstances. Please make sure to keep supporting documents handy to support your stance during the Appeal.

  6. I’m currently appealing an availability issue in Massachusetts. I was accepted to a local community college never enrolled and because at the time when I applied I stated I was accepted they denied me. I was laid off due to lack of work it was a temporary position on August 3, 2018. My previous employer I was with 2+years, however I did quit that job which I’m sure doesn’t help my claim, however I’ve submitted everything from my most recent employer including wages which redetermined me eligible. Now I’m appealing my availability… I’ve contacted the college to get verification letter stating I’m not enrolled nor have I ever been but due to their protocols they fought me tooth and nail to get this verification. Stating there’s nothing to send if I’ve never been so there. Last week they finally sent a certified seal enrollment letter that shows I am inactive and never enrolled or registered within that institution. I think it was to stop me from constantly contacting them. Will this help remove the availability disqualification? Also are availability cases easier to resolve?

    1. Lily,

      To offer a straightforward answer to your question, if you lost the previous job due to involuntary reasons (no fault of yours), you should be eligible to collect.

      1. So I just got my Late Appeal decision after sending in all necessary information as to why I was filing late pertaining to being offered a temporary job. The decision states DETERMINED.

        Not exactly sure what that implies. I’m assuming the worst though. Since no adjudicator ever called me. Can you please clarify?

        1. Lily,

          I suggest you call the Claims Center to find out the status. It more or less means the “Determination” process is now complete.

      2. UPDATE: I called the claims center to clarify the adjudicator’s decision they stated that it means I found eligible for the Late Appeal regarding my availability. The representative also stated that its very strange to be appealing a one party decision ( thus meaning appealing just myself.) Will I still have to continue with this hearing since my enrollment verification proves with a certified seal inactivity and no enrollment has ever been made? Are availability appeals easier to win since its not a wage or reason for termination I am appealing?

        1. Lily,

          This seems like a complicated situation. I suggest you ring up the adjudicator and consult him/her on further steps.

  7. my adjutication was removed and my case still says that im eligble and active does that mean the ruled in my favor ?

    1. Jeannette,

      That is correct. The authorities might have ruled in your favor and ruled out the need for an adjudication. Please call the office for clarification.

  8. After working at various jobs over the course of 24 years and never being fired,I finally was recently. The reason was arguing with a manager because she was unprofessional and baited me into a argument and I signed the statement she wrote against me before I left and now I wonder will the unemployment official side in my favor over me signing the statement..

    1. Jason,

      If you’re able to prove your position preferably with supporting documents, you should be able to collect UI benefits.

  9. Can you be denied unemployment after being terminated for allegedly making a customers grocery bags too heavy. Customer made a complaint that I packed her bags too heavy. When I had only put 4-6 items in each bag. This occurred while I worked for Meijer.

    1. That sounds like an awful reason to terminate employment. Please consider applying for UI benefits until you find employment. You may want to speak to the Unemployment Office in your state once before applying. Please call them.

  10. I moved to NC for a Job the employer begged for me to work for him. The job is 1 hour away. I got sick one day driving there and went to work and told the girl I was working with that I was sick and may need to go home so I call the the staffing lady and the own and told them I’m sick and I’m going home they said OK. Next day get a text saying I’m off for the next 2 think they could not find anyone to work with me see my tech went on vacation. When my tech came back from vacation they told her she will be working alone she sent me the text I was shocked because now it’s two weeks with out work I’m a fulltime worked get a w2 at the end of the year. I work the own stating what is going on why you not having me work I said I will have to file unemployment no response. Umployment told them I walked off the job when the all said I called them when I was leaving stating I was sick and they sent Umployment the call off work text they sent me its been 6 weeks and no amswer on my unemployment case help if you can

    1. Lace,

      Unemployment Insurance benefits are extended to those who lose their job due to involuntary reasons. If you think this was the case, please consider filing until you find employment. Make sure to keep supporting documents handy in case of a dispute.

  11. I filed for unemployment in florida but then moved to Georgia, after I was unable to obtain a job in Florida. I was hired at amazon in Florida but have already moved to Georgia and receiving unemployment at the time. The unemployment is now adjudicating because it picked up that I was a new hire at Amazon but I Couldn’t work for Amazon seeing how I moved out of Florida before I was hired. It has now been eight weeks of claiming with a hold on my funds what will happen next?

    1. Ernest,

      If you still remain unemployed, you should be able to continue claiming UI benefits. Since you’ve moved to Georgia, you can consider transferring your claim over to the new state.

  12. I worked a 3 yr contract with an employment firm. That contract ended unexpectantly and I filed unemployment. The employer called me with 2 jobs. one of the jobs was at the company that I just left and the company had a 6-month wait and I was unsure if I could return to the company. I expressed this to the employer and they said that they would check to see if I could return to the employer. I was trying to avoid rejection/embarrassment for myself and the employer. I was submitted for 2 jobs.

    The employer filed a protest saying I had refused work. I spoke with the adjudicator. (Who called me a day earlier than our call) It turns out two jobs that of the two jobs they said I had refused. they had submitted me for one and the other was the job aforementioned. the employer never got back in touch with me and I eventually applied for the job.

    The adjudicator told me that I would receive two letters in the mail in 5 -7 business days and told me to keep certifying.

    Any idea where this is landing. The employer did not tell the truth and I sent documented information to our phone call. The adjudicator said that they had cancellations and that was why he was calling a day early.

    Any ramifications for the employer not telling the truth.

    1. It’s the time to make a strong case for yourself. Chase the adjudicator at regular intervals and submit the required documents in your support.

  13. I finally got the courage to do this as I now get Social Security but I doubt things have changed. Years ago when I was working I had a sales job and they did all sorts of sexist crap. They would not pay the spiffs to females. They called you names over the intercom. They would break things on products ordered and picked up by customers. People knew about it but would not come forth. When you saw something illegal going on that you were not supposed to see, you got fired. The employer lied about you to the DES and they even lied to future employers so that you never had respect once you worked at their place. The so called judges as your hearings admonished you for speaking out but there was nothing to be done unless others backed you up and they were afraid for their jobs. This still goes on. For the most part it is women judges doing the bidding of male employers. Some of these women should be asking themselves questions about the lives of others they were complicit in destroying. There never was any recourse for sexual harassment and discrimination and there still is not. Have any of these female judges ever thought to require further proofs from the employers. Has any judge ever compelled the employer to proof of sales or production exceeded by the women who have been fired? That would be the most telling. When other situations arise and the female employee has been with the company for more than five years, have any of these judges had the sense to ask if the person lasted with you that long and their last evaluation was superior enough to merit a raise, why do you all of a sudden doubt the employee? There is no common sense to these horrible women and they are there as judges because of their stupidity. The system is geared to protect only the rights of the employer so don’t be down on yourselves if you find yourself a victim because if the employer loses then you have a case! DES judges are paid to destroy people.

  14. Please contact me I’m going to be homeless loose vehicle they are holding my unemployment and I don’t know why I’ve been doing everything and more I’m a cancer patient and have to get to my therapy today I can’t go cause my trucks out of gas and no money

    1. Jerome,

      Hope you get out of this situation soon. Please let us know how we can help you. This is a private forum and our help can be limited. If you’re referring to Unemployment Insurance, please call the Claims Center for further inquiry.

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