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People with 3% mortgages aren't going to sell unless they lose their job and can't make the monthly payment. I mean do you expect a large recession in the next
by vsskanth 3y ago
People with 3% mortgages aren't going to sell unless they lose their job and can't make the monthly payment. I mean do you expect a large recession in the next year ? I don't.
- enraged_camel 3y agoCan you look at this chart, identify the pattern, and then explain why you think a recession isn't imminent? https://i.imgur.com/pkl8nfq.png https://i.imgur.com/pkl8nfq.png
- kortilla 3y agoCan you look at it and explain why you think employment leads to recessions?
- enraged_camel 3y agoIt's not that employment itself leads to a recession, but that low unemployment has been a 100% accurate lagging indicator for recessions.
- jacobolus 3y agoThere's no limit to how long we can have low unemployment, and no rule that recessions have any particular temporal spacing or severity. All we can see from your chart is that occasionally there is a recession, that these are spaced unpredictably in time but usually no longer than 2 decades apart (but sometimes only a few years apart, and plausibly it could be longer), and then unemployment rises from wherever it happens to be. But that doesn't mean the recession is caused by either low unemployment directly or by the causes of low unemployment, or that the recession is at all predictable from unemployment data.
- enraged_camel 3y agoI mean yes, it’s not a causation. But it’s pretty difficult to argue that an extremely strong correlation doesn’t exist.
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- jacobolus 3y agoYour chart shows that during the time where there's no recession, unemployment generally gradually declines, and then when a recession hits unemployment spikes very quickly, irrespective of what level it was at prior to the recession (this seems fairly obvious: the definition of recession is "significant decline in economic activity", which predictably correlates closely with reduced employment). Why do you think this should mean there will be an "imminent" recession? Just because unemployment is currently low?
- enraged_camel 3y agoEmployment is a lagging indicator. In the past, every time unemployment hit rock bottom, a recession followed.
- HDThoreaun 3y agoThat’s tautological though. Rock bottom will always be right before it goes up because that’s what rock bottom means. That doesn’t mean we know when it will go up.