If the unemployment rate slightly rises to 4.0% or higher this month, it could signal a recession in October, according to a mathematical model that correctly projected the 2020 recession.
Should the unemployment rate rise to 4.0% or higher in September, the probability of a recession to occur at the end of October is 73%, according to the model developed by engineer Georg Vrba and RecessionAlert.com CEO Dwaine van Vuuren.
“For what is considered to be a lagging indicator of the economy, the unemployment rate provides surprisingly good signals for the beginnings and ends of recessions,” the analysts wrote in a 2012 post after the model was initially published. The model takes into account economic data and recessions dating back to 1948.
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