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)
This graphs implies that unemployment would start rising soon according to patterns in the past. (look at red line curving away from y-intercept.)
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.
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