Unemployment Rate and Yield Curve Inversion as Recession Signals

 

Fascinating analysis by the St. Louis Fed on the reliability of the two economic indicators forecasting recessions in the US:

Source: Recession Signals: The Yield Curve vs. Unemployment Rate Troughs

Source: Recession Signals: The Yield Curve vs. Unemployment Rate Troughs

 

And the paper’s conclusion:

Overall, both indicators tend to be reliable signals of a coming recession. But as with all recession signals, the wise economic analysts should examine many indicators rather than betting the farm on one or two. (Source: Recession Signals: The Yield Curve vs. Unemployment Rate Troughs)