I closely monitor a few labor market indicators for clues on whether the U.S. economy has already entered or is headed for a recession. They have triggered a recession signal.

One of the indicators I track is displayed in the chart below. The grey-shaded areas represent recession periods in the United States, as designated by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER). Crossings of the blue line up through the orange, horizontal threshold line (see circles) give the recession signals. The most recent one came with the April Unemployment Rate figure.

(Click on image to enlarge)

Although this indicator (and my other indicators) has been time-tested, I always view the signals as an early warning and a good reason to look for changes in other significant economic activities as well.

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