In the economic climate of the 1970s, inflation was high and unemployment rates were low. inflation and unemployment rates were low. inflation and unemployment rates were high. inflation was low and unemployment rates were high.

In the economic climate of the 1970s, inflation and unemployment rates were high.

Inflation had been an extremely gentle 3% per year between 1949 and 1969, but as the seventies began, this began to change and the cost of energy and consumer products began to rise steadily. In addition to the growing competition in the industry for Europe and Japan, the United States faced other difficulties due to the general complacency that occurred during the years of prosperity. Many Americans assumed that good times were going to last forever and there were few attempts to invest in infrastructure and modern manufacturing outside of the defense and aerospace sectors. The boundless optimism and belief in science and progress that characterized the 1950s and 1960s eroded rapidly and opened the way to general cynicism and technology mistrust among Americans, exacerbated by growing concerns about the negative effects in the environment by air and water pollution by cars and industries, especially with events such as the Cuyahoga River fire in Cleveland, Ohio, in 1969 and the nuclear accident at Three Mile Island ten years earlier.

Nixon promised to deal with stagnant growth and inflation, known as "stagflation," through higher taxes and lower spending; this was faced with strong resistance from Congress. As a result, Nixon changed the course and opted to control the currency; its nominees to the Federal Reserve sought a contraction of the money supply through higher interest rates, with few results; narrow monetary policy had little effect in curbing inflation. The cost of living grew 15% accumulated during the first two years of Nixon's presidency.

Irregular employment was also a problem, with 20% of workers unemployed for some period in 1969, a figure that grew to 23% in 1970. Many people had little or no savings by the end of the 1960s, with a fifth of the population in 1969 without liquid assets, and almost half with less than $ 500.

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