Unemployment

Historically, the United States unemployment rate reached a post-World War II high of 9.7% in 1982. It remained high at 9.6% in 1983 as a result of the most severe economic recession since the Great Depression of the 1930s. The unemployment rate then dropped, approaching 5% in 1989, but again began increasing, reaching 6.8% in 1991 and rising to 7.5% in 1992. As the economy improved, the rate fell to 6.9% in 1993. By 1998 the U.S. unemployment rate had dropped to 4.5% and in 1999 reached a low of 4.2%. (See Table 2.1 in Chapter 2.) By April 2000 unemployment had declined to 3.9%, the lowest level in three decades.

With a creeping recession, unemployment once again began to rise in early 2001 and rose significantly following the terrorist attacks on the United States on September 11, 2001. In June 2003, 9.4 million people were out of work, and the national unemployment rate reached a peak of 6.4%. At the beginning of 2005 the unemployment rate was 5.2%. Soon thereafter, the rate reached 5.4%. Between early 2005 and January 2006, the unemployment rate tended to decline. (See Figure 3.1.) Note that the unemployment rate measures people without jobs who are looking for work and thus does not count workers who have lost their jobs and eventually stopped looking for work, such as those who have retired.

INTERNATIONAL UNEMPLOYMENT

In the third quarter of 2005 the United States had an unemployment rate of 5%. In comparison, of the five other countries for which third-quarter 2005 data were available, only Japan had a lower rate (4.4%). Australia's rate was also 5%. Other unemployment rates were: Canada (6%), Germany (9.4%), and France (9.7%). (See Table 3.1.)