David Rosenberg, the veteran economist at Gluskin Sheff, is known for being quite bearish on most things.
But in recent years, he has always stopped short of declaring recessions.
He addresses this in his Breakfast With Dave note today:
If there is one metric that has worked so well over time it is household assessments of the labour market — the consumer sector tends to get it right. Specifically, the University of Michigan survey component that measures consumer expectations on expected changes in unemployment rate. As the chart clearly illustrates, recessions start when this metric slips below 65 without fail. We will start to get worried then when it breaks below 75 (it is now 96) as it did in August 2007, December 200, and May 1990 — all gave us 2-4 months of prepatory time ahead of the fact.
So, we’re in the clear for now.
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