Excess Returns · Tuesday, July 14, 2026
Eric Pachman criticizes the Federal Reserve's continued focus on the unemployment rate for economic forecasting, arguing it is no longer an effective tool for identifying recessions. He suggests that underlying data, like the labor force participation rate, offers a clearer picture of economic distress.
“The world has changed. Like they've just kind of painted themselves into a corner to say the unemployment rate is the one ring that rules them all.”
“And right now, I can tell you, investor, person that cares about America, you will not see the recession coming with the unemployment rate. It's already in the data. The depression, the recession, the crisis. Let's call it the labor crisis.”
“But this is the issue with the BLS right now, and this is the issue with the Fed. It's like, you have to go back and, like, ask Claude. You know, go back and study the history of how these benchmarks came into play.”