Unemployment During the Great Depression Jenna Mallinger December 1, 2006 Macroeconomics

The Great Bull Market The Great Bull Market began the slide into the economy’s depression of the 1930’s Caused a boom in stock exchange from People made too many exchanges, and invested more money than they truly had

Bull Market Pros Provided growth in American industries Huge technological progress Increase in productivity Rise in national income from 33,200 million to 79,200 million ( )

Unemployment during Bull Market Wages didn’t rise even though production did Prices of goods and services failed to decrease The demand for labor was small, leaving many people unemployed

Causes of the Crash of 1929 Too much optimism in the stock market, and over speculation After Hoover’s election people began to doubt the future of the economy Debts were created due to people holding companies and investment trusts Large banks couldn’t be liquidated

Black Thursday October 1929, prices began to fall Panic struck all over the world, a record of 12,894,650 shares were traded Major banks and investment companies bought up great blocks of stocks to stop the panic – Their Attempts FAILED! Panic continued and the next two days the stock market was open, 16,000,000 more shares were traded

Causes of the Great Depression Agriculture crashed in 1919 and continued to weaken Banks over-extended Wages could not keep up with profits By 1920 consumers were limited on the ability to borrow and spend Production was declining and unemployment increasing

Causes of the Great Depression The economy’s confidence had been destroyed Down-sizing of industry caused a rapid unemployment drop Stock prices for the next three years continued to fall By 1932, prices had dropped to just 20% of their original value

The Depression’s Effects Thousands on individual investers were ruined The public lost their savings Poverty and panic spread throughout the nation Less spending and less demand occurred Unemployment skyrocketed Wages all over decreased

Economy Stock prices dropped fast Industries declined Value of assets declined 11,000 of 25,000 banks failed The international trade market decreased Caused a world wide depression

Unemployment The economy was falling fast into a downward spiral The decrease in production meant less jobs for the people The manufacturing output fell to 54% 25-30% of the work force became unemployed, leaving million people without jobs

Presidency Change President Hoover failed to promote recovery for the depression and the economy The American people lost confidence in Hoover Franklin Roosevelt Wins Presidency Introduced major changes in the structure of the economy, such as the New Deal

Roosevelt’s New Deal Increased government regulation Introduced massive public works projects for relief of poverty Provided aid for the unemployed and unfortunate: Civilian Conservation Corp. National Recovery Admin. Federal Deposit Insurance Corp. Securities and Exchange Commission

Ending the Depression Because of the election of President Roosevelt and the dedicated American work force, the economy rose out of the depression. The disaster reminds us today to invest wisely, and to keep a close eye on economic issues.