Unemployment drops during an expansion, then rises heading into a recession. It turns out you can quantify this relationship as a recession predictor:
> According to LaVorgna, since 1948, the economy has always entered or been in a recession when the unemployment rate increases 50 basis points (or 0.50 percentage point) from its trailing cyclical low.
https://www.cnbc.com/2019/02/20/a-recession-indicator-with-a...
Taken with the yield curve inversion in 2019, and other leading indicators, it appears the US economy is headed for the first recession in over 10 years. If previous trends hold, it's within 12-18 months away.
Oddly enough, the stock market typically rallies from the yield curve inversion right into the next recession. So there's money to be made, but it's kind of like trying to gather nickels on the tracks as the locomotive barreling down on you blows its whistle.
However, policymakers will continue to tout the relatively low unemployment rate and booming stock market right into the recession (which can only be declared months after its start).
> According to LaVorgna, since 1948, the economy has always entered or been in a recession when the unemployment rate increases 50 basis points (or 0.50 percentage point) from its trailing cyclical low.
https://www.cnbc.com/2019/02/20/a-recession-indicator-with-a...
Taken with the yield curve inversion in 2019, and other leading indicators, it appears the US economy is headed for the first recession in over 10 years. If previous trends hold, it's within 12-18 months away.
Oddly enough, the stock market typically rallies from the yield curve inversion right into the next recession. So there's money to be made, but it's kind of like trying to gather nickels on the tracks as the locomotive barreling down on you blows its whistle.
However, policymakers will continue to tout the relatively low unemployment rate and booming stock market right into the recession (which can only be declared months after its start).