The Ten Worst Holidays Since the Great Depression

Slow retail sales and the high unemployment rate this year might make people believe that this is one of the more economically difficult holiday seasons in memory. That is not true because the recession also made the 2008 and 2009 holidays hard for millions of Americans.

People are tempted to spend less when times are tough. Fewer presents are exchanged. People travel less. Those without work often despair. The joy that is supposed to accompany the end of each year does not exist for many people.

24/7 Wall St. compared 2010 against each Christmas since the Great Depression. We looked at unemployment, GDP expansion, GDP per capita, and the Consumer Price Index. These numbers show whether a holiday season was merry or not. High inflation erodes the ability of people to buy things. Slow GDP expansion or contraction means that consumer spending is likely to be in retreat. The effects of unemployment are obvious.

Many of the worst holiday periods coincided with deep recessions. This is certainly true with the harsh times in the downturns in the early 1970s and early 1980s. The 1982/1983 recession had a recorded number of months in which unemployment was more than 10%.

People may look back on 2010 as a difficult holiday season for a number of Americans. But, it was not among the worst, as history shows.

The Ten Worst Holidays Since The Great Depression:

10. 2009

Unemployment: 9.3%
GDP Expansion: -2.6%
GDP Per Capita (Inflation Adjusted): $41,890
CPI: -0.4%

The recession which began with the collapse of the housing bubble in 2008 and continues to affect the American economy is at its worst during this year. 2009 sees a rash of bankruptcies, most notably the Chapter 11 filing of Chrysler, as well General Motors, long considered one of the great American blue chip companies. In this year, the national average unemployment rate reaches 9.3%. This is the most joblessness the country has seen in more than a quarter century.

9. 1958

Unemployment: 6.8%
GDP Expansion: -0.9%
GDP Per Capita (Inflation Adjusted): $14,802
CPI: 2.8%

The recession of 1958 is one of the few difficult economic climates during the post-World War II boom, and the first major one since the Great Depression. In the previous year, car sales had declined 31%, wreaking havoc on the American auto industry. In Detroit, unemployment rates reach 20%, and Packard, venerable automaker, ceases operation. Unlike most previous recessions in U.S. history, 1958 also sees a rise in consumer prices, severely hindering the purchasing power of Americans during the holiday season.

8. 1981

Unemployment: 7.6%
GDP Expansion: 2.5%
GDP Per Capita (Inflation Adjusted): $26,030
CPI: 10.3%

1981 marked the beginning of the early 1980’s recession, during which the Fed raised key interest rates in the hopes of slowing rampant inflation. Inflation continues to rise, however, and the economy entered a period of stagflation. In one of the defining moments in the history of labor, 12,000 Air Traffic Controllers strike over a pay dispute. After refusing to return to work, President Reagan fires them all. An assassination attempt is made on Reagan’s life, as well as in Pope John Paul II. Walter Cronkite, the most trusted man in America, retires after 44 years of journalism.

7. 1974

Unemployment: 5.6%
GDP Expansion: -0.6%
GDP Per Capita (Inflation Adjusted): $22,861
CPI: 11%

The United States continues to face record oil prices as a result of an embargo by OAPEC (Organization of Arab Petroleum Exporting Countries) beginning the previous year. The energy crisis is only one component hurting American Consumers. Mounting costs from the Vietnam war, as well as a stock market crash after the collapse of the Bretton Woods monetary relation system leads to the first GDP contraction in 16 years. In this year, President Nixon is impeached after the Watergate scandal.

6. 1946

Unemployment: 3.9%
GDP Expansion: -10.9%
GDP Per Capita (Inflation Adjusted): $12,676
CPI: 8.3%

With the conclusion of the war and the return of millions of soldiers, a shortage of housing and consumer goods leads to a dramatic increase in prices and business costs. The United States begins testing nuclear weapons in the Bikini Atoll, signaling the commencement of the Cold War and nuclear arms race. “It’s A Wonderful Life” – a film about appreciating life in the face of financial hardship – opens five days before Christmas. The film is considered a box office flop.

5. 1947

Unemployment: 3.9%
GDP Expansion: -0.9%
GDP Per Capita (Inflation Adjusted): $12,324
CPI: 14.4%

The United States begins the Marshall Plan, devoting roughly 2% of American GDP to rebuilding war-ravaged Europe in the hopes of strengthening the West against the growing threat of Communism. Problems with inflation continue to worsen, and the Consumer Price Index rises 14.4%, the largest annual increase in recorded U.S. history, before or since.

4. 1980

Unemployment: 7.1%
GDP Expansion: -0.3%
GDP Per Capita (Inflation Adjusted): $25,640
CPI: 13.5%

In 1980, massive inflation and a dive in GDP leads to an increase in unemployment which would continue essentially unchecked until its peak in 1982. Discontent as a result of the recession leads to the election of Ronald Reagan as president in November. U.S. personal bankruptcies increase 47% to 367 thousand. An attempt to rescue prisoners held during the Iran Hostage Crisis fails. John Lennon is shot and killed outside of his New York City apartment.

3. 1949

Unemployment: 5.9%
GDP Expansion: -0.5%
GDP Per Capita (Inflation Adjusted): $12,365
CPI: 1.3%

The American economy contracts, producing the first decline in consumer prices since the Great Depression. The price of housing and health care, however, goes up. The Soviet Union tests its first atomic bomb.

2. 1975

Unemployment: 8.5%
GDP Expansion: -0.2%
GDP Per Capita (Inflation Adjusted): $22,592
CPI: 9.1%

The global economy suffered heavily from continued stagflation, with countries like the U.K. experiencing inflation rates of close to 25%. In the first quarter of the year, the U.S. sees GDP drop 4.8%. A stagnant economy increases wages, resulting in mass layoffs, and the highest unemployment rate since 1941. New York City nearly goes bankrupt after the Federal Government refuses to bail it out, producing the now-famous Daily News headline “[President] Ford to City: Drop Dead.” Ford eventually gives in, loaning the city $2.3 billion.

1. 1982

Unemployment: 9.7%
GDP Expansion: -1.9%
GDP Per Capita (Inflation Adjusted): $25.282
CPI: 6.2%

1982 sees the worst of the early ’80’s recession, as unemployment rises above 10%, including a 10.2% rate for the month of December. GDP contracts 1.9%,  the most it has since 1946.

Michael Sauter and Douglas A. McIntyre