Unemployment and Inflation, 1961–1990 During the 1970s, the short-run Phillips curve relationship that seemed to hold during the 1950s and 1960s broke down as the U.S. economy experienced a combination of high unemployment and high inflation. Economists believe this was the result of both negative supply shocks and the cumulative effect of several years of higher than expected inflation. Inflation came down during the 1980s, and the 1990s were a time of both low unemployment and low inflation.Source: Bureau of Labor Statistics.