The Worst Holidays Since the Great Depression

Retail sales this holiday season are expected to rise 3.8% to a record of $469.1 billion, according to the National Retail Federation. While the increase is less than last year, it is a significant improvement from the slow holiday seasons the last few years.

How does 2011 compare to other years? While probably not among the best, it’s also certainly not among the worst, according to 24/7 Wall St.’s analysis of the worst holidays since the Great Depression.

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

24/7 Wall St. compared 2011 against each holiday season since the Great Depression. We looked at unemployment, GDP expansion (or contraction), GDP per capita, and the Consumer Price Index. These are good indications of whether a holiday season was merry or not. High inflation erodes the ability of people to buy goods and services. Slow GDP expansion or contraction means that consumer spending is likely to be in retreat. The effects of unemployment are obvious.

Not surprisingly, many of the worst holiday periods coincide with deep recessions. This is certainly true for the harsh times during the downturns of the early 1970s and early 1980s. The 1982/1983 recession had a record number of months in which unemployment was more than 10%.

People may look back on 2011 as a difficult holiday season for a number of Americans, but it was not among the worst, as history shows.

These are the 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 that began with the collapse of the housing bubble in 2008 and continues to affect the American economy today was at its worst during 2009. The year was marked by a rash of bankruptcies, most notably the Chapter 11 filing of Chrysler and General Motors, long considered one of the great American blue chip companies. The national average unemployment rate reached 9.3% — the worst 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 rate reached 20%, and Packard, venerable automaker, ceases operation. Unlike most previous recessions in U.S. history, in 1958 consumer prices increased, 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 1980s recession, during which the Federal Reserve raised key interest rates in the hopes of slowing rampant inflation. Inflation continued to rise, however, and the economy entered a period of stagflation — when economic growth is slow or declining and inflation is high. In one of the defining moments in the history of labor, 12,000 Air Traffic Controllers went on strike over a pay dispute. After refusing to return to work, President Reagan fired them all. An assassination attempt was made on Reagan’s life, as well as on Pope John Paul II. Walter Cronkite, the most trusted man in America, retired after 44 years of journalism.

7. 1974
> Unemployment: 5.6%
> GDP Expansion: -0.6%
> GDP Per Capita (Inflation Adjusted): $22,861
> CPI: 11%

In 1974, the U.S. continued to face record oil prices as a result of an embargo by OAPEC (Organization of Arab Petroleum Exporting Countries) that started the previous year. The energy crisis was 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, led to the first GDP contraction in 16 years. Following the Watergate scandal, President Nixon resigned and Congress dropped impeachment proceedings against him.

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 led to a dramatic increase in prices and business costs. The U.S. began testing nuclear weapons in the Bikini Atoll, signaling the commencement of the Cold War and the nuclear arms race. “It’s A Wonderful Life” — a film about appreciating life in the face of financial hardship — opened five days before Christmas. A classic today, the film was considered then a box office flop.

5. 1947
> Unemployment: 3.9%
> GDP Expansion: -0.9%
> GDP Per Capita (Inflation Adjusted): $12,324
> CPI: 14.4%

The U.S. began the Marshall Plan in 1947, devoting roughly 2% of American GDP to rebuilding war-ravaged Europe in the hopes of strengthening the West against the growing threat of communism. Inflation continued to worsen, and the consumer price index rose 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 led to an increase in unemployment that continued, essentially unchecked, until its peak in 1982. Discontent as a result of the recession led to the election of Ronald Reagan as president in November. U.S. personal bankruptcies increase 47% to 367,000. An attempt to rescue prisoners held during the Iran hostage crisis failed. John Lennon was shot and killed outside 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 contracted in 1949, casuing the first decline in consumer prices since the Great Depression. The price of housing and health care, however, went up. The Soviet Union tested 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 in 1975, with countries such as the U.K. experiencing inflation rates of close to 25%. In the first quarter of the year, the U.S. GDP dropped 4.8%. The stagflation caused an increase in wages, which resulted in mass layoffs and the highest unemployment rate since 1941. New York City nearly went bankrupt after the federal government refused to bail it out, producing the now-famous Daily News headline “[President] Ford to City: Drop Dead.” Ford eventually gave in, lending the city $2.3 billion.

1. 1982
> Unemployment: 9.7%
> GDP Expansion: -1.9%
> GDP Per Capita (Inflation Adjusted): $25.282
> CPI: 6.2%

The year 1982 was the worst of the early 1980s recession, with unemployment rising above 10%, including a 10.2% rate for the month of December. GDP contracted 1.9% that year, the most it has since 1946.

Correction: An earlier version of this article stated that President Nixon was impeached. In fact, impeachment proceedings were dropped following his resignation.

Michael B. Sauter and Douglas A. McIntyre