Remember those bears growling through the spring and summer about rising unemployment numbers? September’s better-than-forecast jobs data finally silenced them. But any more bad reports in the months ahead, and they’ll be back.

They’ll also be wrong. Again and again. Season after season.

That’s because not only unemployment but also job growth are, very simply, always late-lagging indicators. They are useless as recession or stock market predictors – except for the fact that a widespread, wrongheaded fear of them in markets is bullish (Fear of a false factor is always bullish).

It seems so intuitively right that rising unemployment should cause recession. Job loss is often personal. We can all imagine the pain and necessary cutbacks. Since consumer spending is 68% of US GDP, job cuts must ripple economywide, causing recession. Right? 

Not at all. History documents consumer spending as stunningly stable — even through truly wretched recessions. During 2007 – 2009’s deep downturn, “Personal Consumption Expenditures” — the broadest measure — fell just 4.1% from peak to trough. During 2001’s recession, they generally rose (outside September’s 9/11-related, month-to-month dip of 1.6%).

The recently unemployed may skimp on luxuries. But the vast majority of consumer spending is essential, not discretionary. Shoppers dig deep to keep buying groceries, mostly pay their rent (or mortgage) and utilities. Spending rarely booms or busts big, whether hiring rises or retreats.

To see this, think like a CEO. When downturns start weighing on sales, execs cut costs. They slash inventory, shrink bonuses, travel expenses, perks, cancel marketing campaigns, kill expansion plans. But cutting headcount? That is a dreaded last resort that CEOs hate. Layoffs cause bad press, disrupt firms’ cultures and workers’ lives. And experienced help is tough and costly to replace when times finally improve.

Likewise, firms never hire when business first improves. They seek sustained sales gains lest they get boomeranged by some false dawn. Legendary “jobless recovery” fretting, common in early economic rebounds, perpetually misunderstands this. Jobs follow growth, never lead it, always.

Examples? While 2007–2009’s recession officially ended in June 2009, unemployment peaked later, at 10% in October. Even then it only fell because discouraged workers stopped seeking work, so weren’t technically counted as unemployed (how it’s calculated). Payrolls didn’t bottom until February 2010.