According to jobless claims, recession unlikely b4 2019(re-post)
I posted this post in mid-2017. I am reposting as the debate has risen recently whether a recession is near or not. it might be handy in 2019.
Original Post:
Jobless claims figures have been a reliable indicator of recessions. By examining a historical chart that goes back to 1960s we see a similar pattern in the behavior of claims and recessions.
Every single recession the U.S. encountered in the underlying period was preceded by a rise in jobless claims. The chart above draws the quarterly jobless claims. The shaded areas are the periods of recession.
The quarters that the U.S. officially got into recession in all cases were preceded by multiple quarters of rising jobless claims, and in most cases these rises are consecutive.
For example, ahead of the 2008 great recession, jobless claims increased for three consecutive quarters.
-2001 recession was preceded by 5 quarters of rising claims( latest 3 were consecutive)
-1990-1991 recession was preceded by 8 quarters of rising claims (latest 3 were consecutive)
-The earlier recessions have also had the same pattern.
Before any recession, we had a minimum of three quarters of rising jobless claims and in one case we had 8 quarters.
Having that in mind, it is highly unlikely that the U.S. will encounter an official recession soon(before 2019).
----------------------------------
2019 Update:
We had the jobless claims rise in the past quarter, however, it remain low.
In my opinion, we need at least two more quarters of jobless claims rising to start "seriously" considering a recession in 2020. Let's see how things develop the first 6 months of 2019.
Best
Technician
Original Post:
Jobless claims figures have been a reliable indicator of recessions. By examining a historical chart that goes back to 1960s we see a similar pattern in the behavior of claims and recessions.
Every single recession the U.S. encountered in the underlying period was preceded by a rise in jobless claims. The chart above draws the quarterly jobless claims. The shaded areas are the periods of recession.
The quarters that the U.S. officially got into recession in all cases were preceded by multiple quarters of rising jobless claims, and in most cases these rises are consecutive.
For example, ahead of the 2008 great recession, jobless claims increased for three consecutive quarters.
-2001 recession was preceded by 5 quarters of rising claims( latest 3 were consecutive)
-1990-1991 recession was preceded by 8 quarters of rising claims (latest 3 were consecutive)
-The earlier recessions have also had the same pattern.
Before any recession, we had a minimum of three quarters of rising jobless claims and in one case we had 8 quarters.
Having that in mind, it is highly unlikely that the U.S. will encounter an official recession soon(before 2019).
----------------------------------
2019 Update:
We had the jobless claims rise in the past quarter, however, it remain low.
In my opinion, we need at least two more quarters of jobless claims rising to start "seriously" considering a recession in 2020. Let's see how things develop the first 6 months of 2019.
Best
Technician
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.