DTUS - The Unemployment Rate May Soon Signal A Recession: Update - February 1 2018

A reliable source for recession forecasting is the unemployment rate, which can provide signals for the beginning and end of recessions (Appendix B charts the UER recession indicator for the period 1948 to 2015). The unemployment rate model (article link) updated with the January 2019 rate of 4.0% does not signal a recession.

The model relies on four indicators to signal recessions:

• The short 12-period and a long 60-period exponential moving average ((EMA)) of the unemployment rate ((UER)).
• The eight-month smoothed annualized growth rate of the UER ((UERg)).
• The 19-week rate