Part 4/8:
Typically, market bottoms during economic recessions don’t occur until the unemployment rate has peaked, indicating potential remaining downside for the stock market. The labor market's fragility, hinted at by increased unemployment in 2025, raises concerns about prolonged economic hardship.
The Yield Curve: Insights into Economic Health
To deepen the analysis of the market's trajectory, economists often refer to the yield curve, a valuable tool for assessing the health of the job market. A historically inverted yield curve—in the context of the recent market trends—has traditionally signaled impending recessions, wherein a drop below zero heralds rising unemployment.