The US business cycle reached a peak during the 3rd quarter of '81, and started a contraction that lasted until the 4th quarter of '82. When the contraction ended, the next expansion lasted until the 3rd quarter of '90. In the 1st quarter of '82, real GDP fell by 1.7 percent, and stayed relatively flat for the remainder of the year. This flat period was preceded by a decline in real GDP in '81 and then after '82 real GDP began to increase. During 1982 the unemployment rate climbed from around 8.5 percent to a peak of 10.8 percent in November, the highest rate since 1940, then fell throughout '83. Restrictive monetary policy brought inflation from 10.3 percent in '81 to 6.2 percent in '82, this decline continued and in '83 inflation was as low as 3.2 percent. Fiscal policy became expansionary towards the end of 1981, when the tax cuts mandated by the Economic Recovery Tax Act (ERTA) began to be phased in. Military expenditures also increased, and the government's budget deficit rose significantly. The Dow Jones Industrial Average stayed between 800 and 900 for most of the year, then towards the end it climbed to over 1000.