The misery index is an economic indicator that adds the unemployment rate to the inflation rate. Created by economist Arthur Okun, the index is based on the assumption that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. A combination of rising inflation and more people of out of work implies a deterioration in economic performance and a rise in the misery index.
During the Presidential campaign of 1976, Democratic candidate, Jimmy Carter, made frequent references to the misery index, which by the summer of 1976 was at 13.57%. Carter stated that no man responsible for giving a country a misery index that high, had a right to even ask to be President of the United States. He won the 1976 election. However, by 1980, when President Carter was running for re-election against Ronald Reagan, the misery index had reached an all-time high of 21.98%. Carter lost the election to Reagan in a landslide.
- The lowest recorded value for the American misery index was 2.97% (July, 1957). The highest value for the misery index was 21.98% (June, 1980).
- The misery index during the first term of the administration of President George W. Bush was better than it had been in most years since World War II. By the end of 2004 it was 7.4, which is lower than it had been in every one of President Bill Clinton's first four years. It was at 8.4 when Clinton won another term in 1996.