The unemployment rate fell beneath 4% for the past several months, weekly jobless claims are at a 49-year low, and wages are growing at their fastest rate since 2009. As the chart below shows, when the U.S. unemployment rate falls under 4%, recessions follow soon after (recessions are marked by the gray shaded areas on the chart). By the time the unemployment rate is under 4%, the economic cycle is already mature, the labor market is tight, and inflation is becoming a concern. The prospect of recession and bear market in the not-too-distant future is alarming for stock market investors, especially considering that the U.S. stock market is experiencing a dangerous bubble rather than a healthy bull market. Please read my recent detailed stock market bubble report in Forbes for more information.

Source: Forbes September 11, 2018 01:30 UTC