The Lowest Monthly Federal Unemployment Rate on Record In the United States Is..
One of the questions that people often email me to ask is - what is the lowest unemployment rate on record in the United States?
Since I am asked this question so often, I thought that I would turn the answer into a complete post of its own.
First off, let's look at the national unemployment rate numbers.
The BLS (Bureau of Labor Statistics) started tracking unemployment data in January of 1948, so our data only goes back that far.
The lowest national unemployment rate on record in the United States is 2.5%. This number was posted in two consecutive months - May and June of 1953.
From 1945 to 1955, the United States experienced three separate recessions. The fact that the US economy was a bit off-kilter during this period of time is not a surprise, as the country had just exited WWII.
An 11 month recession in the United States started in November of 1948. By the time that this recession had ended, the US national unemployment rate had spiked all the way from 3.8% to 7.9%.
Over the next 4 years, the US economy would speed up dramatically. In 1950, the country posted GDP growth of 8.7%. 1951-1953 looked like this in terms of GDP growth in the country:
The economy benefited from the fact that the country was now involved in another war - the Korean War. In the early '50s, spending on national defense rose dramatically. As the economy quickly expanded and the national unemployment rate plummeted, average Americans started to open up their wallets and purses once again.
By the spring of 1953, the national unemployment rate had fallen to just 2.5%. It seems hard to conceive of a scenario where the national unemployment rate in the country would ever fall this low again.
Another recession would soon hit the nation's economy, and by August of 1954, the national unemployment rate was up to 6%.
Now let's look at the lowest state unemployment rates on record. The BLS has been kind enough to provide us with state unemployment data that goes back to January of 1976.
The lowest state unemployment rate on record is 2.1%. The record is shared by a couple of states - Connecticut and New Hampshire.
Connecticut posted an unemployment rate of 2.1% in both September and October of 2000, while New Hampshire had a nine month stretch from September of 1986 through to May of 1987 where they posted a 2.1% unemployment rate.
Now let's take a look at the lowest unemployment rate on record for each and every state:
(Note: I included Puerto Rico and District of Columbia because the BLS includes them in their state unemployment numbers)
District of Columbia, 4.8%
New Hampshire, 2.1%
New Jersey, 3.6%
New Mexico, 3.4%
New York, 4.0%
North Carolina, 3.1%
North Dakota, 2.6%
Puerto Rico, 9.2%
Rhode Island, 2.9%
South Carolina, 3.2%
South Dakota, 2.5%
West Virginia, 3.9%
Some of the states listed above (such as Nevada and Michigan) have seen their unemployment rates add 10 percentage points from their all-time lows. Nevada, for instance, currently has an unemployment rate of 14.5%.
Source: Historical Unemployment Rates
Source: Historical State Unemployment Rates
Source: Historical GDP Numbers
Filed under: General Knowledge