- For what is considered to be a lagging indicator of the economy, the unemployment rate provides surprisingly good signals for the beginning and end of recessions.
- This model, backtested to 1948, reliably provided recession signals.
- The model, updated with the January 2019 rate of 4.0%, does not signal a recession.
- However, if unemployment rate rises to 4.1% in the coming months the model would then signal recession.
