The Labor Market Suggests a Recession Could Be Coming Soon

by Doug Short, Advisor Perspectives
Business Insider

With the surge in last week’s new unemployment claims, the largest in 65 weeks, and the fourth smallest number of monthly new nonfarm jobs since January 2014, today’s updated of the Labor Market Conditions Index takes on special significance.

The Labor Market Conditions Index (LMCI) is a relatively recent indicator developed by Federal Reserve economists to assess changes in the labor market conditions. It is a dynamic factor model of labor market indicators, essentially a diffusion index subject to extensive revisions based on nineteen underlying indicators in nine broad categories (see the table at the bottom for details).

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