That isn’t to say that there is no possibility of a serious economic downturn, but if such unpleasantness arises, it won’t be because of a low unemployment rate. The article depicted those economic shocks superimposed on a timeline showing low unemployment immediately preceding them. The fact is, as we have seen, that the three economic shocks preceded by a low unemployment rate had causes other than low unemployment. What, then, is the source of the speculative notion that low unemployment might have the power to cause economic upheaval? Zumbrun writes, “Economic theory draws clear linkages between low unemployment and inflation.” The sentence is technically correct.

Source: Forbes June 09, 2017 18:57 UTC