On April 11, 2014, in an attempt to project the direction of unemployment and the subsequent economic outcome, we said the following:
“Given our prior experience with Dow Theory and downside projections, any decline in the unemployment rate below 5.87%-5.90% would be exceptional with only the 4.40% and 3.80% levels as mere reflections of an overextended economic boom which should be followed by an equally impressive bust.”
On August 24, 2018, we said the following:
“If the unemployment rate drops further then we would have stretched the capacity of the economy to its 48-year limits on the downside. If the unemployment rate increases from the current level it would, as has been the case in the past, jump dramatically.”
Since August 2018, the unemployment rate declined to 3.50% in December 2019. The dramatic jump in the unemployment rate has followed immediately afterwards.
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