Breaking Down America's Misery Index In 2024

Is your economic life improving, or is it getting worse? Are you aware of the Misery Index?

Authored by James Bollen

What is America's current economic state, and how does it affect the average person? Here's a breakdown of America's Misery Index in 2024.

What Is The Misery Index?

The Misery Index is a powerful tool for measuring the economic hardship felt by everyday people. It considers the two critical factors contributing to a person’s living standards: unemployment and inflation.

The Misery Index is calculated using the seasonally adjusted unemployment rate and adding the annual inflation rate. Both unemployment and inflation negatively impact your financial well-being.

The Misery Index combines these two vital measurements to determine overall economic health. It effectively assesses stagflation, which refers to the high inflation and unemployment rates.

Making Sense Of The Misery Index

The Misery Index consists of two crucial factors: the inflation rate and the unemployment rate. In the United States, the unemployment rate is calculated by taking the total number of able-bodied adults actively seeking employment as a percentage of the workforce.

However, the misery index does not consider those who have given up on finding work or those who have dropped out of the workforce entirely.

Conversely, inflation results from an increase in the money supply caused by an expansion of the money supply and consumer debt. As a result, consumers see higher prices for goods and services.

Inflation can significantly impact individuals' living standards by reducing their purchasing power and raising the cost of living.

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Misery Index = Annual Inflation Rate + Seasonally Adjusted Rate of Unemployment

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Current State Of The Misery Index

The Misery Index rating for February was 7.053%. Although it has decreased from 15.03% at the beginning of the COVID-19 pandemic, it is higher than last month's rating of 6.791%. The number rose again in February to 7.053%.

Source: Y Charts

Look beyond the monthly U3 numbers the Bureau of Labor Statistics releases to the public. You can see that the current Misery Index is almost the same as the estimated U6 unemployment rate.