New Labor Share data came out today for 1st quarter 2016. It is 100.1. As I expected, it is still climbing.
Why did I expect this? Because unemployment was dropping against an estimated limit that I have been watching. So labor share needed to rise.
There are some graphs that imply a higher risk of recession. When the red dots in the AS-ED model start rising along close AS lines, this has been a signal of imposing recession in the past.
The output gap is falling to a level after rising that has signaled an impending recession in the past. (look at green line)
The economy looks to be 1 to 4 quarters away from a recession. However the recession alert graph is still not showing a recession, even though it is hovering towards the red line. Conceivably the line could be in a zone where a recession could be triggered. (between the yellow and red horizontal lines.)
Obviously not a good time for the Fed to raise rates next month. The economy is weakened.
My models see a recession likely to form before the end of 2016.