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What Are The Chances Of A “Double Dip” Recession? at Trader’s Narrative





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While a lot of data suggests that the great recession ended in June 2009, many are concerned about the possibility of a ‘double dip’ recession. You can see this reflected in the number of mentions that the term “double dip” is repeated in the media as well as the number of internet searches for it.

Here is a chart from Google Trends showing the growing popularity of the term in the US:

google trends double dip US chart Jan 2010

The spikes correspond to August 23rd 2009 and November 15th 2009. This is the same chart from Google Trends but represents data for the entire globe:

google trends double dip Global chart Jan 2010

And here’s a chart (courtesy of Grant’s Interest Rate Observer) showing similar data from another source:
double dip references in periodicals Aug 2009

It is wise to be cautious when you find yourself among the majority because usually the majority is wrong. But if we zoom back a mere two years, when I wondered if the recession was inevitable, Google Trends was showing a similar growing concern for the word “recession”. And that proved an accurate prediction of what was to come. So I wonder if the popularity of “double dip” is less contrarian and more prescient.

Of course, throughout this analysis, I’m assuming here that “double dip” isn’t followed by “glazed donuts” but rather refers to the economy.

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One Response to “What Are The Chances Of A “Double Dip” Recession?”  

  1. 1 burt

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    It stands to reason that “double dip” would only start being searched after we came out of the first dip. My guess is that a phrase relating to “single dip” would be fading out.

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