It is official: we’re miserable. In fact, due to the terribly sad August unemployment numbers, the misery index is the worst it’s been in 17 years.
The misery index is the unemployment rate (6.1%) added to the inflation rate (5.6%). High unemployment rates and rising inflation create both economic and social problems for the country. Therefore, the lower the misery index, the better. The misery index was created by Arthur Okun, Chairman of the Council of Economic Advisors to President Lyndon Johnson in the 1960’s, and has been used as a gauge for economic well-being since then.
The misery index is now up to 11.7%—the highest it’s been since May, 1991. The unemployment rate is 6.1%, the highest it’s been in 5 years. This means more people are unemployed now than in the past 5 years. Not good news for new graduates still searching for their first big job.
But job seekers aren’t the only ones who should be paying attention. The misery index may become a part of upcoming Presidential debates, or election news. It’s a catchy term, a descriptive way to suggest that we’re in a recession. Carter and Reagan both made good use of the misery index in the 1976 and 1980 elections, respectively. And with unemployment and inflation on the rise, the misery index is making a comeback.
For more information about the Misery Index, contact: Campaign for America’s Future.