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"Over the last six decades, it turns out, the stock market on average has performed better when the nation's unemployment rate was higher than when it was lower.
It's quite a marked difference, in fact. Consider a study conducted by Ned Davis Research, the quantitative research firm, in which the performance of the Standard & Poor's 500 index [SPX] since 1948 was correlated with different levels of the unemployment rate.
According to the firm, the S&P 500 produced an average annualized gain of 13.5% when the unemployment rate was above 6%, in contrast to just 2.1% when it was at or below 4.3%. When the unemployment rate was in between 4.3% and 6%, the S&P 500 produced an average annualized gain of 5.2%. Needless to say, we currently fall squarely in the 'above 6%' category, with the nation's unemployment rate rising earlier this month to above 7%."

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