Introduction:
Labor is a scarce resource that is imperative to the success of individual companies, big and small. However, its scarcity isn't a fixed rate. Ceteris paribus, the more easily companies can get labor, the more easily they can grow and expand. This goes the other way, too. If companies can't find labor, they will have more trouble maintaining growth and they will struggle overall. In a simplified form, this means that having more access to labor gives companies more potential to grow.
How This Connects To Unemployment Rates:
The idea of having easy access to labor previously mentioned essentially means having a high number of people attempting to get a job. The number of people looking for a job is correlated with the number of unemployed people, as unemployed people many times want to get a job. In other words, companies have more access to labor in a time when the unemployment rate is high (and vice versa).
Conclusion:
With the information in the past two paragraphs, you should have gotten the idea that companies, and therefore the economy as a whole, have more potential to grow when unemployment rates are high and less opportunity to grow when unemployment rates are low. The main idea is that you might want to consider buying during times when unemployment rates are high, but this is not financial advice.
Labor is a scarce resource that is imperative to the success of individual companies, big and small. However, its scarcity isn't a fixed rate. Ceteris paribus, the more easily companies can get labor, the more easily they can grow and expand. This goes the other way, too. If companies can't find labor, they will have more trouble maintaining growth and they will struggle overall. In a simplified form, this means that having more access to labor gives companies more potential to grow.
How This Connects To Unemployment Rates:
The idea of having easy access to labor previously mentioned essentially means having a high number of people attempting to get a job. The number of people looking for a job is correlated with the number of unemployed people, as unemployed people many times want to get a job. In other words, companies have more access to labor in a time when the unemployment rate is high (and vice versa).
Conclusion:
With the information in the past two paragraphs, you should have gotten the idea that companies, and therefore the economy as a whole, have more potential to grow when unemployment rates are high and less opportunity to grow when unemployment rates are low. The main idea is that you might want to consider buying during times when unemployment rates are high, but this is not financial advice.