Is Effective Demand showing the limit of the Business Cycle… again?

Effective Demand is basically a demand limit upon the business cycle. Wouldn’t it be great if it could be determined? Then we would know where the limit of a business cycles is. Well maybe we can determine effective demand.
A simple equation for the Effective Demand Limit relates labor share to the utilization of labor and capital. Labor share represents the Effective Demand limit.

EDL = Non-farm business labor share * 0.762  –  (capacity utilization*(1 – unemployment rate))

EDL will want to stay above zero, such that, labor share*0.762 (underlined on left) will stay above the utilization of labor and capital (underlined on right).

Here is the graph of the data. (link)

update UT index

Recessions are in gray. The zero x-axis in the graph represents when the plot falls to near zero before each recession. EDL again has hit the same point that was hit twice before the 2008 recession.

I do not see a recession yet. Some are saying that we are close. Anyway, if a recession was to form again with the plot staying above zero, the equation would show an unusual consistency in predicting the limit of business cycles.

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