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State of the U.S. economy the year you were born

  • State of the U.S. economy during the year you were born

    The United States in the past century has gone from a developing industrialized nation to a global economic powerhouse. This country survived two major recessions (and several minor ones), weathered numerous wars, evolved its manufacturing and service industries, and developed a groundbreaking tech sector. But growth is rarely a straight line, as indicated by the state of the U.S. economy year-over-year. We have lived through dips and pitfalls, steady climbs and leaps.

    Today, the U.S. is facing its biggest economic challenge since the Great Depression due to COVID-19. With unemployment in the double digits (and growing), national debt rising by the trillions (with likely more on the way), and a push to reopen more and more of the country, Americans view the country's economic prospects bleakly. Seventy percent of people view the current state of the economy as poor, according to a national survey released May 22 by The Associated Press-NORC Center for Public Affairs Research.

    With all of that unfolding in real-time, Stacker set out to trace the major events that define the economic legacy of the century. We combined economic data and history to take a hard look at the country’s changing economy through the years. In each slide, you can find six metrics describing the economy from that year including the Consumer Price Index (CPI: the weighted average price of a bundle of goods and services that can be used to track inflation), the Gross Domestic Product (GDP: combined monetary value of all goods and services produced within a country’s borders in a given year), the nation’s federal debt, unemployment rate, and average or median household income of U.S. households. All data has been adjusted for inflation using the 2019 CPI.

    Sources for these data are as follows:

    - CPI from 1920 to 2019: Minneapolis Federal Reserve
    - Population from 1920 to 1959: U.S. Census historical population estimates
    - Population from 1960 to 2018: St. Louis Federal Reserve
    - Population 2019: Census population clock
    - GDP from 1920 to 1928: “What Was the GDP Then?” study by Samuel H. Williamson
    - GDP from 1929 to 2919: Bureau of Economic Analysis
    - National debt from 1920 to 1939, 2018 to 2019: Treasury Direct
    - National debt from 1940 to 2017: Obama White House Archives, Federal debt at end of year table
    - Unemployment from 1920 to 1940: U.S. Census Historical Statistics of the United States report
    - Unemployment from 1940 to 1948: Bureau of Labor Statistics historical unemployment estimates
    - Unemployment from 1949 to 2019: Bureau of Labor Statistics
    - Average household income from 1920 to 1952: Income Inequality in the United States, 1913-2002 study by Thomas Piketty and Emmanuel Saez
    - Median household income from 1953 to 2019: U.S. Census historical income tables

    Read on to find out how the U.S. economy was faring the year you were born and why.

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  • 1920

    - Population: 106.5 million
    - CPI annual average: 20 (+15.6% annual change)
    - GDP: $1,141 billion ($10,718 per capita)
    - Federal debt: $331,796 million (29.1% of GDP)
    - Unemployment rate: 1.3%
    - Average household income: $17,127

    Inflation and spending during World War I led to a recession in 1920, now often called a “forgotten depression,” with high inflation rates and high unemployment. Prohibition—the national ban of the production, sale, and consumption of alcohol—also went into effect in 1920. Those who supported Prohibition legislation expected an end to alcohol sales to benefit the economy by driving up consumption of household goods, food and soft drinks, and tickets to theater and other amusements. Instead, the end to liquor sales put restaurants out of business and caused an overall decline in entertainment and other consumption.

  • 1921

    - Population: 108.5 million
    - CPI annual average: 17.9 (-10.9% annual change)
    - GDP: $1,062 billion ($9,781 per capita)
    - Federal debt: $342,516 million (32.3% of GDP)
    - Unemployment rate: 11.2%
    - Average household income: $15,116

    To recover from the 1920–21 recession, the federal government cut half of its spending and reduced tax rates for all income brackets in a laissez-faire move between 1920 and 1922. Much of the private sector had already begun to recover by the summer of 1921. By the Great Depression, America’s economy in the 1920s grew by 42%.

  • 1922

    - Population: 110.0 million
    - CPI annual average: 16.8 (-6.2% annual change)
    - GDP: $1,128 billion ($10,254 per capita)
    - Federal debt: $349,508 million (31.0% of GDP)
    - Unemployment rate: 6.8%
    - Average household income: $17,060

    Continued recovery from the 1920–1921 depression came to the United States by way of a dropping unemployment rate. President Warren Harding continued work to reduce the national budget.

  • 1923

    - Population: 111.9 million
    - CPI annual average: 17.1 (+1.8% annual change)
    - GDP: $1,290 billion ($11,519 per capita)
    - Federal debt: $334,200 million (25.9% of GDP)
    - Unemployment rate: 1.7%
    - Average household income: $18,976

    In August 1923, President Harding died of a heart attack and Vice President Calvin Coolidge was sworn in as president. Coolidge’s top priority was business: He aimed to clean up corruption, lower taxes, and reduce government spending.

  • 1924

    - Population: 114.1 million
    - CPI annual average: 17.1 (+0.4% annual change)
    - GDP: $1,313 billion ($11,504 per capita)
    - Federal debt: $317,768 million (24.2% of GDP)
    - Unemployment rate: 4.6%
    - Average household income: $18,747

    American economic growth continued throughout 1924, earning the decade the moniker of the Roaring Twenties. President Coolidge won a full term in office in 1924. Major cultural institution Metro Goldwyn Mayer (MGM) was founded, and the first Macy’s Thanksgiving Day parade was held in New York City.

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  • 1925

    - Population: 115.8 million
    - CPI annual average: 17.5 (+2.4% annual change)
    - GDP: $1,336 billion ($11,536 per capita)
    - Federal debt: $299,771 million (22.4% of GDP)
    - Unemployment rate: 1.8%
    - Average household income: $18,938

    In 1925, the federal tax rate for the highest income bracket was lowered to 25%—the lowest since World War I. The federal tax rate in 2020 for the highest earners is 37%.

  • 1926

    - Population: 117.4 million
    - CPI annual average: 17.7 (+0.9% annual change)
    - GDP: $1,414 billion ($12,045 per capita)
    - Federal debt: $283,772 million (20.1% of GDP)
    - Unemployment rate: 1%
    - Average household income: $19,137

    Robert Goddard successfully launched the first liquid-fuel rocket in Massachusetts in 1926, a precursor to later NASA designs. Down south, a massive hurricane devastated Miami and nearby parts of Florida, causing damages that would cost more than $164 billion today.

  • 1927

    - Population: 119.0 million
    - CPI annual average: 17.4 (-1.9% annual change)
    - GDP: $1,418 billion ($11,909 per capita)
    - Federal debt: $272,040 million (19.2% of GDP)
    - Unemployment rate: 3.5%
    - Average household income: $19,280

    1927 was the year of Charles Lindbergh’s landmark solo flight from New York to Paris. It was also the year of further government moves toward a laissez-faire system, as the discount rate on loans made to banks was lowered from 4% to 3.5%.

  • 1928

    - Population: 120.5 million
    - CPI annual average: 17.2 (-1.2% annual change)
    - GDP: $1,461 billion ($12,127 per capita)
    - Federal debt: $261,710 million (17.9% of GDP)
    - Unemployment rate: 3.9%
    - Average household income: $19,675

    In 1928, widespread speculation on Wall Street caused a huge increase in stock prices (an average increase of about 40%). This event later became known as the Great Bull Market.

  • 1929

    - Population: 121.8 million
    - CPI annual average: 17.2 (0.0% annual change)
    - GDP: $1,555 billion ($12,770 per capita)
    - Federal debt: $25,171 million (1.6% of GDP)
    - Unemployment rate: 0.9%
    - Average household income: $20,512

    Herbert Hoover, who served as the secretary of commerce under Presidents Harding and Coolidge, became the U.S. president in 1929. He was confident in American economic prosperity when he was sworn in, but by the following September, the stock market had begun to pull back. The crash culminated on “Black Thursday,” Oct. 24, when a record of 12,894,650 shares were traded in one day, marking the beginning of the Great Depression.

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