These days the business press is full of predictions of recessions. This could get people worried, except that the track record of economists in predicting recessions is basically awful. As much fun as a bunch of scary warnings from economists is, it is best to look at the data.

At the most basic level, it is important to recognize that some sectors are very cyclical, meaning they grow rapidly in upturns and fall sharply in recessions, and others tend not to fluctuate very much over the course of a business cycle. The cyclical group is led by housing construction, durable goods consumption (cars and big household appliances), nonresidential construction, equipment investment, and inventories. These components of demand tend to plunge in a recession.

On the other hand, we have several components of demand that are mostly unresponsive to the business cycle. Spending on consumer services (largely medical spending and rent) varies little over the course of the business cycle. Spending on consumer services fell just 0.3 percent in 2009 and actually rose through all prior postwar recessions.