Is Canada Next? Recession Is “Quite Contained”
“In the current context, if you look at the growth numbers, the recession is effectively in the goods sector, it’s in the oil industry, it’s weak growth in manufacturing, weak growth in construction,” explained Kevin Page, Canada’s former parliamentary budget officer, a watchdog role charged with analyzing the state of the economy and government finances.
“It’s quite contained,” he told CBC radio, with an eerie echo of the Fed’s description of the US housing bust in the early stages of the Financial Crisis. There’s “still lots of growth in the service sector,” he said.
That’s what everyone is hoping. And it would just be a technical recession – two consecutive quarters of negative growth – rather than an official recession.
There wasn’t a lot of room for optimism. The economy shed 6,400 jobs in June, according to Statistics Canada, with gains in full-time jobs and losses in part-time jobs. The unemployment rate remained at 6.8%, same since February. But there are numerous indications that contractors, which do much of the work in the oil patch, are still working, but a lot fewer hours, and that this deterioration, in Calgary for example, hasn’t been fully captured by unemployment statistics.
“If you look at the job picture, it’s gotten progressively weaker through the summer,” Page said. “I think that would be a concern for the government and a concern for the overall strength of our economy.”
“The economy’s weak, you can’t deny that,” Page added. “It will be pretty hard for Minister Oliver to keep that line that we’re not in a technical recession.”
Which is exactly what Finance Minister Joe Oliver has been “adamant” in denying, according to CBC. He referred to the 96,000 full-time jobs created so far in 2015 and cited, of all things, the IMF, which “confirmed what I and numerous independent analysts have been saying – the Canadian economy will grow this year.”
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