The Worst Stock Market Collapses Since The Great Depression

1. 1929-32
> DJIA decline from peak to trough: 90%
> Unemployment: 24.9% (1933)
> Change in unemployment: 678.1% (1929-33)
> Change in GDP: -21.4% (1930-33)
> Consumer price index: -9.9% (1932)

Triggered by a period of rampant speculation, the stock market had its worst crash ever in 1929. Beginning with “Black Tuesday,” the market lost a quarter of its value in just two days. From peak to trough, the Dow Jones Industrials declined a massive 90%. The crash marked the beginning of the Great Depression, during which unemployment reached nearly 25%, up from 1929’s rate of 3.2%. Thirteen to 15 million people were left without work in the U.S.

2. 2007-09
> DJIA decline from peak to trough: 54%
> Unemployment: 9.3% (2009)
> Change in unemployment: 102.2% (2007-09)
> Change in GDP: -4.4% (2007-09)
> Consumer price index: -0.4% (2009)

The effects from the down markets of the late 2000s are still being felt today. The U.S. economy had been built up on overextended consumer credit and faulty mortgages, and as these risks were exposed a number of major American financial institutions either collapsed or were bailed out by the federal government. This set off the Great Recession. The national unemployment rate more than doubled from December 2007 to October 2009, increasing from 5.0% to 10.1%. The price of commodities, such as oil, skyrocketed while housing prices tumbled.

3. 1937-38
> DJIA decline from peak to trough: 52%
> Unemployment: 19% (1938)
> Change in unemployment: 32.9% (1937-38)
> Change in GDP: -4.2% (1937-38)
> Consumer price index: -2.1% (1938)

In 1937,there was another major downturn in the economy. Although unemployment had remained high since the depression — floating around 14% in 1937 — it increased to 19% in 1938. GDP per capita also fell from $7,971 to $7,638. During that time, the Dow fell by more than 50%.

4. 1973-74
> DJIA decline from peak to trough: 46%
> Unemployment: 8.5% (1975)
> Change in unemployment: 73.5% (1973-75)
> Change in GDP: -2.6% (1973-75)
> Consumer price index: 11% (1974)

From January 1973 to December 1974, the stock market lost 46% of its value. This happened after the end of the Bretton Woods monetary system and was heightened by the 1973 oil crisis. The U.S. economy entered a recession that was distinctly marked by stagflation: a combination of high inflation and high unemployment. Unemployment peaked at 9% in May 1975. From 1972 to 1973, inflation more than doubled to 8.8%, and continued to rise for the remainder of the decade.

5. 1939-42
> DJIA decline from peak to trough: 39%
> Unemployment: 17.2% (1939)
> Change in unemployment: -72.7% (1939-42)
> Change in GDP: 7.9% (1939-40)
> Consumer price index: 10.9% (1942)

The Great Depression is widely regarded as having ended in 1939. This is also the year that marks the beginning of World War II. The country’s desperately high unemployment rate finally began to improve, dropping as low as 1.2% by 1944. Excitement over the economic effects of the war caused a buying frenzy in the U.S. From late August to mid-September 1939, the Dow jumped 20%. The buying panic quickly died, however, and markets began to decline. The economy was saved, however, by the war effort.