The monthly unemployment rate for November rose to 6.7% — up from 6.5% in October. The chart here shows the pattern of unemployment, recessions and the real (inflation-adjusted) price of the S&P Composite since 1948.

Unemployment is a lagging indicator that moves inversely with equity prices (see chart). Note the increasing peaks in unemployment in 1971, 1975 and 1982. The inverse pattern becomes clearer when viewed against real (inflation-adjusted) S&P Composite, with its successively lower bear market bottoms. The mirror relationship seems to be repeating itself with the current and previous bear markets.

The start date of 1948 was determined by the earliest monthly unemployment figures collected by the Bureau of Labor Statistics. The best source for the historic data is the Federal Reserve Bank of St. Louis.

Note: The S&P Composite splices the S&P 500 index, which was initiated in 1957, with the earlier S&P index, which included 233 companies.