Job losses suggest economy is in recession.

Clearly , historical data reveals that recession is always accompanied by a resultant unemployment . As economic activity slows down unemployment increases and for the most part this results from job loses . However , the historical data also shows that unemployment peaks at some time after the recession had begun and even extends up to the time the economy starts to recover . It is , therefore , a lagged indicator to recession . Its direction remains steady and changes only a few quarters after the economy had changed its own direction . It is suggestive of recession , but it

cannot forecast whether recession will likely to occur or not

A market update by the Associated Press in January 13 , 2008 reports that the economy is headed to a recession before the end of this year its forecast is based on other factors that the unemployment rate 's leap to a two year high

Using the movement of the unemployment rate to forecast the rise and fall of the economy seems to be weak , as historical data of unemployment rate has not shown it as a leading indicator of recession , but a lagged indicator . The historical data shows that during the recessions in 1981-1982 , 1990-1991 , and 2001 , unemployment rates peaked at least a year after the recession has already occurred

The same article cites that such is the fallout from a housing meltdown that threatens to slingshot the country into a recession (Associated Press , 2008

The possibility of a recession gleaned from housing market performance data is more viable because a slowdown in the housing market during periods of very brisk economic activity can often mean that the a recession is forthcoming , and increased activity in the same market during recession often spells that better times are just around the corner . Of greater predictive value are data from...