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So if recessions are characterized by large, sharp spikes in unemployment, expansions are characterized by a slow, gradual reduction. The pattern of slow and uneven reduction in the unemployment rates that we’ve seen in the past few years is not indicative of a recession; it’s exactly what you’d expect during an expansion.

Employment isn’t the only business cycle indicator, of course: What about GDP? In particular, what do we make of the fall in Statistics Canada’s estimate for GDP in January? Not much, it turns out. Business cycle phases are not uniform; periods of slow growth and even the occasional short-lived episode of negative growth are consistent with our experience of expansions. The most recent slowdown is typical of what we’ve seen of expansions ever since Statistics Canada started producing estimates for monthly GDP.

I know, I know: What about the possibility that Canada may soon fall into recession? Well, what about it? Forecasting the arrival of recessions is pretty much a crapshoot, mainly because they occur so rarely. The C.D. Howe Institute’s Business Cycle Council (of which I am a member) has identified only 10 recessions in Canada since the end of the Second World War. There simply aren’t enough data points to identify any empirical regularities that can be used to generate usable forecasts

That doesn’t mean that people aren’t willing to try, of course; as I mentioned earlier, the business of forecasting economic crises (“and how you can profit!”) is lively and apparently quite lucrative. But these pundits are making predictions based on not much more than gut instinct and the firm knowledge that if that they get it wrong, no-one will call them on it. As Dan Gardner put it in his book Future Babble, these forecasts are riskless gambles: “Heads I win, tails you forget we made a bet.”