Recession dead ahead

4.2 percent unemployment does not change the picture

For new readers, to understand what I put so much credence in the graph below, please read “Whither ‘animal spirits,’” which explains the adaptation level theoretic explanation of business cycles. Things go up when we feel that conditions are better than usual, and things go down when we feel things are getting worse. Even though the reported unemployment rate of 4.2 percent is lower than last month’s 4.3 percent, it is now further above the adaptation level of 4.14 percent. The graph shows that these conditions have never not been followed by a recession.

Here is the confidence metric constructed by reversing the sign on the difference between the unemployment rate and the adaptation level. Confidence is now “negative” by my metric and will worsen as it enters a cycle of self-organized criticality, or “self-fulfilling prophecy,” in which people reduce consumption, and businesses reduce employment until they feel they can meet payroll.

There was a similar slight hitch upward in 2008 before the plunge into the Great Financial Crisis.

The weakness in the labor market is undeniable. They will only be able to cover it up for another month or two before the unemployment rate skyrockets.

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By the way, Substack’s new “elections tab” for posts about the election is bullshit heavily censored. I posted this observation yesterday, and it was immediately taken down:

When Biden repealed the “Wait in Mexico” policy his first day in office, he effectively opened the southern border to an inflow of illegal immigrants equal in number to the population of several states. The Democrats expect these people to vote for Harris and are intent on enabling them to do so. This is fraud on a massive scale. The Democrats are controlled by an international elite whose goals are the demoralization and depopulation of the United States.

If you agree, please repost this message.

The elections tab’s top pinned post was from Neocon Anne Appelbaum on how to reach blue defense hawks to convince them to vote for Harris because HARRIS IS FOR WAR!

Those were my words, not hers.

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Have a blessed weekend! Pray for peace unceasingly!