Eric Atkins – August 26, 2010

Web searches for the phrase "double-dip recession" have soared since April, according to Google

Bad economic signs

  • Government stimulus spending aimed at preventing a global economic collapse is running out.

  • Canadian inflation has been soft.

  • Persistent weakness in U.S. employment, durable goods orders and the real estate sector.

Good economic signs

  • Most of the world’s economies have been growing this year, and are forecast to continue to do so (though at a slower pace).

  • Canadian home prices continue to rise.

  • The rapid growth with which most economies exited the recession was unsustainable, so a slowdown is growth is expected.

Defining a recession


Two consecutive quarters of negative economic growth.

Official (U.S.)

“A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade ... The [NBER] gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions.”
- National Bureau of Economic Research (U.S.)

What’s a double-dip recession?

  • A recession followed by a brief recovery, then another recession.

What causes them?

  • Generally, high unemployment and spending cutbacks in the first recession.

What does a double dip look like?

  • Some believe the U.S. recession of the early 1980s was a double-dip, or W-shaped recession.

  • The U.S. National Bureau of Economic Research disagrees, saying there were two separate recessions at the time.

Recessions compared (Canada)



Drop in GDP


12 months



16 months



24 months


What the experts say:

Ben Bernanke, U.S. Federal reserve chairman.

He said in June he doesn’t believe the U.S. will slide back into a recession. But in July he said the outlook for the U.S. economy is “unusually uncertain.”

Mark Carney, Bank of Canada governor

In July, Mr. Carney pointed to expected economic growth rates of three per cent and said the probability of a double dip recession in Canada or the U.S. is “very low.”

David Rosenberg, Gluskin Sheff

Chances are better than 50-50, the always bearish economist says.

Nouriel Roubini, NYU professor

Odds are better than 40 per cent, the super-bear says.

Sources: National Bureau of Economic Research, U.S. Department of Labour, U.S. Commerce Department, Investopedia, Statistics Canada, Reuters