1940-1950
It only took 10 years for the median home prices to skyrocket. In 1940 they sat at $2,938 while in 1950 they were up to $7,354. The annual inflation rate also saw a slow and steady growth from 0.7% in 1940 to 1.1% in 1950.
It wasn’t until America entered World War II that the economy started to really recover since it was retooled for wartime production. That’s when employment and the GNP rose dramatically.
This, of course, lead to an inventory recession- we simply had an excess of available goods following the boom of the war years. This was further exacerbated by the fact that we became a nation of savers rather than spenders.
The inventory recession lasted between May 1946 and June 1949, causing the S&P 500 to slide by 29.6%. Despite this worse time period of the decade, we have to remember that the unemployment rate dropped in the 1940s, from 15% to 5.5%.
