The high U.S. unemployment rate in 1975, which peaked at 8.5%, was primarily due to the severe recession from 1973 to 1975[1][4]. This economic downturn was driven by a significant decline in real Gross National Product (GNP), falling nearly 7% from its 1973 peak[5]. Contributing factors included a sharp decrease in investment purchases and an unfavorable shift in household balance sheets[1][5]. Additionally, the period was marked by “stagflation,” a combination of high inflation and high unemployment, exacerbated by rising oil prices and fiscal imbalances[9].

Citations: [1] The U.S. Recession of 1973-75 www.sjsu.edu/faculty/watkins/rec1974.htm [2] [PDF] Economic Report of the President 1975 www.presidency.ucsb.edu/sites/default/…/1975.pdf [3] Employment and unemployment during 1975 - jstor www.jstor.org/stable/41840119 [4] Household Income in 1975 & Selected Social & Economic … www.census.gov/library/…/p60-104.html [5] What Depressed the Consumer? The Household Balance Sheet … brookings.edu/…/what-depressed-the-consumer-the-h… [6] Labor and Manpower 1976: Overview - CQ Almanac Online Edition library.cqpress.com/cqalmanac/document.php?id=cqa… [7] Historical U.S. Unemployment Rate by Year - Investopedia investopedia.com/historical-us-unemployment-rate-… [8] [PDF] The Economy in 1975 - FRASER fraser.stlouisfed.org/…/balles_19750507.pdf [9] The Great Inflation | Federal Reserve History www.federalreservehistory.org/…/great-inflation