07 Sep The Misery Index reaches 11.3%
The unemployment figures for August 2008 were released this week, reaching an unexpected 6.1%. As a result, the Misery Index is likely to go even higher. The Misery Index is a measure of the rate of inflation and the unemployment rates. The rate attempts to show the pressures placed on consumers in the United States.
The rate of 11.3% is the sum of the July unemployment rate of 5.7% and inflation rate of 5.6%. Assuming the inflation rate stays the same, a new misery index adjusted for the August unemployment figures would be 11.7% The last time we saw rates so high was 1991. The rates have been higher, reaching an all time high of 21.98% in June 1980. Unfortunately, the index starts in 1948 does not go back to the days of the Great Depression when surely the rates would have been higher still.
However, the Misery Index only tells part of the story. I am sure that if we figured in the rate of home foreclosures and defaults and the numbers of bankruptcies, we would see the true effect of the current economy on the U.S. consumer. Or you could jut ignore the whole thing and go get that new iPod on that credit card you just got in the mail.