On This Day In Finance: June 1 - Misery Index Hits All-Time High

By Investopedia Staff | June 01, 2009 AAA
On This Day In Finance: June 1 - Misery Index Hits All-Time High

On June 1, 1980, the misery index hit an all-time high of 21.98%. The misery index was created by economist Arthur Okun and is calculated by adding together the national unemployment rate and the inflation rate. The index assumes that high unemployment and rising inflation create a negative social cost for the nation.

The previous high for the misery index was 19.90%, which occured in January, 1975 while former President Gerald Ford was in office. During the 1976 campaign Jimmy Carter often stated that the nation deserved a better President than one who would allow the index to reach such levels.

Unfortunately for Carter, by the end of his first term as President, the misery index had reached a new high and the economy was in stagflation; the writing was on the wall for the former President.

The misery index numbers are obtained from unemployment data from the U.S. Department of Labor and inflation rates from the Financial Trend Forecaster. (To learn more, see What is the difference between inflation and stagflation?)

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