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Issue 1 · Late October 2026
US stocks → Unemployment
Common explanation (Ripple · opposite direction): Falling stock prices shrink wealth, demand and hiring fall, and unemployment rises.
This issue: US stocks at 94 (hot), Unemployment at 44 (neutral) — at least one is in the neutral range (40–60), so we make no call this issue.
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.
Hover over a pendulum or tick to see its name; click to open that indicator.Tap a pendulum or tick to see its name; tap again to open that indicator.
Where it stands now
Where the two indicators stand this issue
US stocks: 94 (84.4% above its 10-year average). Unemployment: 44 (0.33 percentage points below its 10-year average, about as far below as usual).
Tests
Does this link hold up?
Common explanationFalling stock prices shrink wealth, demand and hiring fall, and unemployment risesSource: National Bureau of Economic Research, “The Stock Market Crash Really Did Cause the Great Recession” (2013). The article shows only that stocks move first statistically and gives no lead time; this site reuses the 0–24 months of “US stocks → Nonfarm payrolls” (also a wealth effect).
Tested against our dataBy position (each compared with its own normal — do their highs and lows move together?): agreement between US stocks and Unemployment (12-month lag) is +0.69 (an opposite-direction link: the raw correlation is −0.69, and a negative correlation fits, so the sign is flipped); across every 5-year period (shifted one year at a time), the two moved in that direction in 45 of 54.By change (how far each position moved over the past 12 months — do their swings move together?): agreement +0.34; the two moved in that direction in 40 of 53. The two measures disagree: their long-run highs and lows move together, but their swings within a year often do not (by change, only “weak”).
By position45/54
By change40/53
1966–19712019–2024
Each cell is a five-year period (shifted one year at a time): filled = in step with the common explanation, outlined = out of step.●●○Supported by one measure
Periods when it did not holdAcross the 5-year periods (shifted one year at a time, so they overlap), the periods out of step cover — by position (54 periods): 1975–1982, 1989–1996, 2000–2005 and 2014–2020; by change (53 periods): 1974–1982, 1987–1998 and 2002–2009.
Does it predict?Prediction test (a historical test, unrelated to “Where it stands now” above and not this site’s forecast): does adding the past 12 months of US stocks make Unemployment easier to predict? Result: Top tier (p < 0.001; the smaller, the less likely by chance). Forecasting a recent stretch of data not used for estimation, the error is 0.8% lower.●●●Top tier
History
The two lines, overlaid
Data: Professor Robert J. Shiller, public data; US Bureau of Labor Statistics, via FRED (Federal Reserve Bank of St. Louis). Positions: our calculation.
US stocksUnemployment
Time lag
At what lag do they match best?
Longer bar = moves more in the direction of the common explanation (the number is the agreement).
same month+0.67
3-month lag+0.70
6-month lag+0.71
9-month lag+0.71
12-month lag+0.69
18-month lag+0.63
Limits
What this card cannot tell you
Moving together does not prove that one causes the other.
Results for every period are listed in full, including periods that did not agree.