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 https://www.sjsu.edu/faculty/watkins/rec1974.htm [2] [PDF] Economic Report of the President 1975 https://www.presidency.ucsb.edu/sites/default/files/books/presidential-documents-archive-guidebook/the-economic-report-of-the-president-truman-1947-obama-2017/1975.pdf [3] Employment and unemployment during 1975 - jstor https://www.jstor.org/stable/41840119 [4] Household Income in 1975 & Selected Social & Economic … https://www.census.gov/library/publications/1977/demo/p60-104.html [5] What Depressed the Consumer? The Household Balance Sheet … https://www.brookings.edu/articles/what-depressed-the-consumer-the-household-balance-sheet-and-the-1973-75-recession/ [6] Labor and Manpower 1976: Overview - CQ Almanac Online Edition https://library.cqpress.com/cqalmanac/document.php?id=cqal76-1190041 [7] Historical U.S. Unemployment Rate by Year - Investopedia https://www.investopedia.com/historical-us-unemployment-rate-by-year-7495494 [8] [PDF] The Economy in 1975 - FRASER https://fraser.stlouisfed.org/files/docs/historical/frbsf/presidents/balles_19750507.pdf [9] The Great Inflation | Federal Reserve History https://www.federalreservehistory.org/essays/great-inflation