Past Recessions and the Unemployment Rate
It certainly seems odd to think that low unemployment can be a bad sign, but when you consider its relationship with our old friend interest rates, it starts to make a lot more sense. However, it’s worth noting that unemployment is likely to be low during periods of expansion and periods of expansion usually precede a recession.
So, while unemployment is low at the end of a period of economic growth, it’s also low in the middle of one, so it’s never really that easy to draw a line between a low unemployment rate and a pending recession.
