Market Timing with Unemployment Rate IndicatorUsing a simple moving average crossover of the unemployment rate to time the marketby GTStockmaster115
Civilian unemployment rate Civilian unemployment rate is calculated by the number of unemployed people divided by the total size of the labor force and is expressed as a percentage. People who are jobless, looking for jobs, and available for work are considered unemployed. The labor force is defined as people who are either employed or unemployed. The unemployment rate is the share of the labor force that is jobless, expressed as a percentage. It is a lagging indicator, meaning that it generally rises or falls in the wake of changing economic conditions, rather than anticipating them. When the economy is in poor shape and jobs are scarce, the unemployment rate can be expected to rise. When the economy is growing at a healthy rate and jobs are relatively plentiful, it can be expected to fall. In the U.S., the U3 or U-3 rate, which the Bureau of Labor Statistics (BLS) releases as part of its monthly employment situation report, is the most commonly cited national rate. It is not the only metric available, however, and it receives criticism for giving the impression that the labor market is healthier than alternative measures would indicate. For this reason some observers prefer to track the more comprehensive U6 rate The official unemployment rate is known as U3. It defines unemployed people as those who are willing and available to work, and who have actively sought work within the past four weeks. Those with temporary, part-time or full-time jobs are considered employed, as are those who perform at least 15 hours of unpaid family work. To calculate the unemployment rate, the number of unemployed people is divided by the number of people in the labor force, which consists of all employed and unemployed people. The ratio is expressed as a percentage.Educationby KAGOR_INVEST116
Using the Unemployment Rate as a ContraindicatorThis is my first time using TradingView, or posting here so please forgive any flaws or failings in my format. This chart highlights the U.S. Unemployment rate (bottom section) compared to the S&P 500 (top section). The Unemployment Rate also has a 12-month moving average overlaying it. I’m posting this idea as much to be an inquiry as anything. But, it appears to me that at least with respect to recent bull and bear markets looking at the unemployment rate and it’s 12-month moving average crossover has been helpful in deciding whether to significantly increase or decrease equities as a percentage of asset allocation. Various studies indicate that asset allocation is the number one indicator of long-term performance. Are you mostly in, or mostly out of the right asset classes at the right time? With the unemployment rate peaking near the beginning of this bull market and having declined throughout, I am convinced that it bares close watching now that it is approaching the 4% level. A lot of other bull markets have ended just as unemployment rates bottomed. If we can identify the inflection point, or even estimate it within two or three calendar quarters it could significantly impact our long term performance by helping us reduce equity exposure either before the next bear market, near the peak, or within a reasonable time after it has begun and before the damage is too severe. I can see the crossover is not precise for fine tuning timing, but does give some rough context and insights into when risks are lessening or building. I welcome any other thoughts, ideas, feedback, or suggestions that may help expand the discussion and insights related to unemployment as a market indicator and look forward to hearing them… by Onajourney4
$SPX $SPY Unemployment and continued claims bottoming out.So we going to keep that bottomed out for next 4 straight years?by stockspy3
Expect multi year SP500 down trend to begin.When unemployment rate crosses 12 month ma signals long term trend change in SP500. Rate just crossed to upside, expect multi year SP500 down trend to begin.Shortby Roll-The-Bones2
WARNING: Beware of RecessionWhenever the unemployment rate has crossed above the 12 month moving average, almost always a recession has soon followed. Here we are now.by gurple2
Recession Looming.Private Update of a chart copied earlier from someone here on TV a while back Can't remember whoby Streetsurfer2
MACD and StochRSI accurately predict unemployment ratesNext month's unemployment rate will determine if the MACD crosses and if we could potentially enter into a recessionby J_Sims9
Chart Identifying When A Recession Starts When the 3 Month Unemployment Average Goes Above The 3 Year Moving Average A Recession Is In Progress. The chart above shows every recession from 1953 to 2008 and shows when the moving average occurrence takes place it's a recession. by BTCMarket2228
Unemployment Prediction Model with Scary Accuracy!This RSI-MA Model Predicts Unemployment Rate With Scary Accuracy! Although high unemployment usually occurs during economic recessions, it doesn't always mean that equity valuations would drop, nor does rising unemployment always mean recession. On the monthly chart of the official national unemployment rate: Unemployment Momentum Rising = MA6(RSI3) cross>50 Unemployment Momentum Dropping = MA6(RSI3) cross< 50by Stable_Camel2216
Timing the First Rate Hike on the Fed's 'Dual Mandate'The Fed's rate hike timing is 'data dependent'. Few data points are as comprehensive and influential for determining monetary policy than the BLS's monthly labor statistics. The unemployment rate is good for the employment element of the mandate, but there is also an inflation gauge: wage growth. Will this data offer enough of a push to shift interest rate expectations - hawkish or dovish?by JohnKicklighter6620
UNEMPLOYMENT RATE NOW WITHIN TOUCHING DISTANCE OF NAIRU ESTIMATEOctober was the ninth consecutive month where the headline payrolls figure came in above 200k, rendering this year’s January to October period the strongest in fifteen years. The US NAIRU may be 5.2% or it may be 5.7%. But wherever it lies, the actual unemployment rate is moving swiftly towards it. Friday’s Employment Situation Report showed that the US economy added 214k jobs last month. Although weaker than most forecasters – Fathom included – had expected, it was nevertheless the ninth consecutive month where the headline payrolls figure came in above 200k, rendering this year’s January to October period was the strongest in fifteen years. In its latest policy statement, the FOMC acknowledged that “underutilisation of labor market resources … … gradually diminishing”. Previously, underutilisation had been described repeatedly as “significant”. In our view, the US labour market is tightening rapidly. The four-week moving average of initial jobless claims fell to 279K in the week-ending November 1st – the lowest reading in more than fourteen years. The non-manufacturing ISM employment index can also be helpful in predicting payrolls from time to time, and this rose sharply in October to 59.6. It was the combination of weak initial claims and a strong reading on the ISM survey that had led us to expect a stronger payrolls figure this month; our own forecast was for an above-consensus rise of 300k. The headline unemployment rate fell by 0.1 percentage points to 5.8% in October. According to the OECD, US unemployment is already below the non-accelerating inflation rate of unemployment, or NAIRU. It is just 0.1 percentage points above the Congressional Budget Office (CBO) estimate of the short-term NAIRU, although it remains 0.3 percentage points above the central tendency range of FOMC members’ forecasts of the longer-run unemployment rate. The salient fact is that, wherever the precise value of the NAIRU might lie – and there will always be some uncertainty about this – the actual rate of unemployment is closing in on it rapidly. In fact, it is unprecedented for the gap between the actual unemployment rate and the NAIRU to diminish so rapidly while policy remains on hold. If the labour market continues to tighten then this should soon feed through to stronger wage growth. Growth in average hourly earnings remained at 2.0% in the twelve months to October according to the Bureau of Labor Statistics. But the Employment Compensation Index for private industry workers – the measure that includes wages, benefits and bonuses – rose at its fastest pace in over five years in the four-quarters to Q3. One data point does not seal it, of course. However, the National Federation of Independent Business survey, which has good leading indicator properties, also shows that the net proportion of small firms planning to raise wages is the highest since December 2008. Shortby charttrader3315
Unemployment rate vs MarketShowing how the market responds to the unemployment rate.Longby khboker224