In April 3, 2017, we said the following:
“All that is left is for the unemployment rate to fall to 4.40% and 3.80%. What is the constant challenge to any rising or declining trend? Getting old and tired. The manifestation of the declining trend getting old and tired is best represented in the percentage rate of change over the previous year. When the trend starts on the path of a decelerated rate, you have a fair idea of what is coming.”
So far, the unemployment rate has declined to 4.10%, an average of the 3.80% and 4.40% that was anticipated last year. It is no monumental feat to suggest that the unemployment rate could decline from the level of 4.80% to 4.40% in 2017. However, is something else to suggest that the unemployment rate could get down to 3.80% when it was hovering around 7.50% on July 26, 2013.
Our unvarnished assessment of the unemployment rate in July 2013 was as follows:
“It is important to understand that the 10% and 3.8% unemployment rates are undesirable scenarios. The 10% unemployment rate is in the depths of a “recession” and the 3.8% unemployment rate at the height of a overextended economic boom.”
As we approach the 3.80% level, it should go without saying that all the signs are in place for an overextended economic boom. Eight years of economic recovery without a recession indicates that a recession is due. Below, we attempt to estimate the timing of the next recession based on our April 3, 2017 unemployment review.
