Misery index (economics)

For the American death metal band, see Misery Index (band).

The Misery Index is an economic indicator, created by economist Arthur Okun, and found by adding the unemployment rate to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. It is often incorrectly attributed to Chicago economist Robert Barro in the 1970s, due to the Barro Misery Index that additionally includes GDP and the bank rate.

U.S. Misery Index

Misery Index - Era by U.S president

Index = Unemployment rate + Inflation rate

Rank	President	Time Period	Index Average	Low	High
5	Harry Truman	1948 - 1952	7.87	1952-12 = 3.45	1948-01 = 13.63
1	Dwight Eisenhower	1953 - 1960	6.26	1953-07 = 2.97	1958-04 = 10.98
3	John F. Kennedy	1961 - 1962	7.27	1962-07 = 6.40	1961-07 = 8.38
2	Lyndon Johnson	1963 - 1968	6.78	1965-11 = 5.70	1968-07 = 8.19
7	Richard Nixon	1969 - 1973	9.98	1968-01 = 7.80	1973-12 = 13.61
10	Gerald Ford	1974 - 1976	15.93	1976-12 = 12.66	1975-01 = 19.90
11	Jimmy Carter	1977 - 1980	16.27	1978-04 = 12.60	1980-06 = 21.98
9	Ronald Reagan	1981 - 1988	12.19	1986-12 = 7.70	1981-09 = 19.33
8	George H.W. Bush	1989 - 1992	10.68	1989-09 = 9.64	1990-11 = 12.47
4	William J. Clinton	1993 - 2000	7.80	1998-04 = 5.74	1993-01 = 10.56
6	George W. Bush	2001 - 2005	7.98	2002-01 = 6.64	2005-09 = 9.97

Misery & Crime

Some economists posit that the components of the Misery Index drive the crime rate to a degree. They have found that the Misery Index and the Crime Rate correlate strongly and that the Misery Index seems to lead the Crime Rate by a year or so.

Data Sources

The data for the misery index is obtained from unemployment data obtained from the U.S. Department of Labor and Inflation Rate from Financial Trend Forecaster®. The exact methods used for measuring unemployment and inflation have changed over time.

Related Indexes

The Despondency Index, developed by the Bureau of Inverse Technology, correlates, in real time, the suicide rate measured with the Suicide Box at the Golden Gate Bridge, to the Dow Jones Industrial Average.

External links

• The current and historical Misery Index
• PBS.org Teachers Guide: Jimmy Carter and the Misery Index