80 Years After Black Tuesday
Eighty years ago, the stock market experienced the most significant day of its infamous 1929 crash. Dubbed "Black Tuesday," 16 million shares were traded on the New York Stock Exchange. The ticker tape was running more than three hours behind. When the market bell rang at 7:45pm, the losses were tallied and the one-day slide totaled nearly a $14 billion loss in value. The Dow Jones Industrial Average lost just over 30 points in one day, which represented a nearly 12% loss. America has endured approximately 13 recessions including our present economic slump since that dark day, but what else has occurred during those eight decades? (Learn about the series of events that triggered the Great Depression, in The Crash Of 1929 - Could It Happen Again?) Automobiles and Domestic Production
U.S. automobile production reached a peak of 4 million in 1929 and quickly dropped off, not to see that same point again until well after World War II. Today, the beleaguered auto industry is expected to produce just 8.7 million cars, off from a previous high of 17.4 million in 2000. However, the increase in the price of a barrel of crude oil has exponentially outpaced auto production – from 65 cents eight decades ago to approximately $78 today.
In 1929, the gross domestic product stood at $103.1 billion. Today, our country's GDP is approximately $14.3 trillion, an increase of 13,492% (not adjusted for inflation) in 80 years, or approximately 1,687% per decade since 1929.
In 1929, fewer than one in five Americans (19% of the U.S. population) had completed high school, and only 3.9% of Americans completed four or more years of college. In 2009 more than 85% of Americans are projected to complete high school and nearly 29% will earn at least a Bachelor's degree.
Employment and Wages
The U.S. unemployment rate stood at just over 3% in 1929. There were just over 88 million Americans and a labor force of just 49.4 million, of which only 1.5 million were unemployed. Today, the U.S. Bureau of Labor Statistics reports a labor force of 153 million and a national unemployment rate of approximately 9.8%.
In 1929, there were 553,000 paid civilian employees of the federal government. Today more than 1.8 million civilian employees work for the federal government (not including the post office), making it the nation's largest employer.
Before the 1929 stock market crash, there was no national minimum wage standard. That was established in 1938 through the Fair Labor Standards Act. At its inception, the minimum wage was 25 cents per hour; it is $7.25 today. In 1929, the average annual salary was $1,236, and according to the U.S. Census Bureau, in 2009 the U.S. real median household income is $50,303.
Home ownership steadily grew from 49% in 1929 to just over 67% today. The home ownership rate hit its high (of a little more than 69%) in 2005. In response to massive losses during the Great Depression, the government created a secondary mortgage market in 1938. The first government-sponsored enterprise (GSE) – Fannie Mae – was given $1 billion in purchasing power from its federal creator to buy loans from banks and increase liquidity. Before Fannie Mae (and its twin, Freddie Mac) were seized by the federal government in September, 2008, they held or guaranteed more than $5 trillion in debt.
It would be nearly impossible to list all of the inventions that have been introduced since October, 1929, but some of the most significant ones for American consumers, investors and corporations include:
- the integrated circuit, microchip, computer, modem, microprocessors, the internet
- ballpoint pens, scotch tape, fax machines, photocopiers
- helicopters, jet engines
- radar, transistors, optic fiber, lasers
- color television, mobile phones, microwave ovens
- atomic and hydrogen bombs
- bar codes, credit cards, ATMs
- penicillin, MRIs, the artificial heart, oral contraceptives
The average American born in 1929 could expect to live just 59.1 years, whereas a baby born in 2009 can look forward to living, on average, 80 years.
New York Stock Exchange (NYSE)
The New York Stock Exchange (NYSE) has rapidly evolved since Black Tuesday. The NYSE volume reached the 10 million daily share volume mark in 1929, and its highest single volume day since then was 7.3 billion on October 10, 2008. Notable NYSE changes since 1929 include:
- 1943 - Women traders allowed onto the floor
- 1953 - Automated quotes introduced
- 1966 - Real-time ticker arrived
- 1977 - Foreign brokers admitted
- 1978 - Intermarket trading system (ITS) established
- 1997 - Wireless data system used
- 2000 - First NYSE global index launched
- 2001 - Trading switched from fractions to decimals
- 2007 - NYSE Euronext, the first global marketplace, established
The world's population has burgeoned from to 1.8 billion to 6.8 billion, and the U.S. population has jumped from 121 million to more than 307 million. There have been seven national census undertakings in the U.S. since 1929. The 23rd is slated for 2010. (See how people's movements, ages, deaths and buying patterns affect portfolios worldwide, in Demographic Trends And The Implications For Investment.)
U.S. National Debt
The national debt currently stands at more than $11.9 trillion, representing a 74,275% increase (not adjusted for inflation) from its level of $16.9 billion in 1929.
The U.S. has fought in six major wars since 1929: World War II, The Korean War, Vietnam, Desert Storm, Enduring Freedom and Iraqi Freedom. (Blitzkrieg? Dawn raids? Sounds like the markets and the battlefield have a few things in common! Find out more in War's Influence On Wall Street.)
While this is by no means an exhaustive list, it begins to give you an idea of the scope of change we've experienced as a nation since that ominous day on Wall Street 80 years ago today. Without doubt, the next 80 years will usher in another unforetold number of changes.