Employment
44neutral
0.33 percentage points below its 10-year average, about as far below as usual | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
The share of the US labor force that is unemployed.
On this site, unemployment above its own normal is called “hot”: hot and cold here describe position only, not whether the economy is doing well or badly. Rising unemployment usually signals a weakening economy.
No official data were published for Oct 2025 (US government shutdown); we filled the gap by linear interpolation between the months before and after.
Unemployment above its own normal = “hot”: hot and cold here describe position only, not whether the economy is doing well or badly.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also neutral
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every neutral month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with Unemployment neutral, excluding the current period (116)All months (707)
Median of the deepest drop below the starting month within the next 5 years: −18.3% for months with Unemployment neutral; −6.9% for all months.
The neutral months come from a small number of market episodes (10), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast. “US stocks” means the S&P 500 price index compiled by Professor Shiller (monthly average, excluding dividends).
| Median position | Back to neutral (40–60) | Still neutral | |
|---|---|---|---|
| 1 yr later | 46neutral | 31% | 31% |
| 3 yr later | 51neutral | 17% | 17% |
| 5 yr later | 39cool | 9% | 9% |
Has hot or cold lined up with later returns?
1967–2021: average yearly change in US stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
Nonfarm payrollstoUnemploymentCommon explanation: Knock-on · opposite direction
When job growth slows, the unemployment rate rises
This issue: Nonfarm payrolls at 28 (cool), Unemployment at 44 (neutral) — at least one is in the neutral range (40–60), so we make no call this issue.
Supported by the dataAgreement +0.50 · in step in 49 of 54 5-year periods
UnemploymenttoFed funds rateCommon explanation: Cause · opposite direction
When unemployment rises, the central bank cuts rates to support jobs (its dual mandate)
This issue: Unemployment at 44 (neutral), Fed funds rate at 72 (warm) — at least one is in the neutral range (40–60), so we make no call this issue.
Weak or inconsistentAgreement +0.30 · in step in 43 of 48 5-year periods
Values
Data and sources