With the Initial Jobless Claims number regularly rising and the Unemployment Rate also ticking upward, the Labor Market continues to show signs of softening. Jobs have been the solitary unflappable buttress of the economy for the last two years. While other closely watched statistics have undulated, the job market has not. The low unemployment rate for this cycle was in January and April 2023 at 3.4%. That number has slowly risen to hit 4.0% last month. Over the most recent 60 years, whenever the Unemployment Rate has risen 0.6% from the cyclical low, the U.S. economy entered a recession within three months. Every single time. To reiterate, we often don’t know that we’re in a recession until the trailing economic indicators pop up several more months down the road. I think we’re on the precipice of a slowdown that, because of pressures from those who issue government paychecks, won’t be fully acknowledged by the Department of Commerce until after the election in November. By then, we’ll be four months into a recession and the laggard GDP will be under water again.
I’m not a conspiracy theorist, I’m a data analyst and a hopeful mortgage lender. The data point to a weakening economy which leads to recession. And recessions usher in lower interest rates. And lower rates are my jam.
