Canada Enters Recession

There had been talk about a Canadian recession for some time now, but now it’s “official.” Tamsin McMahon reported on The Globe and Mail (Canada) website Tuesday:

Canada’s economy shrank for a second straight quarter, the weakest six-month period since the Great Recession, sending the country into a technical recession even as strong growth in June suggests the pain may be short-lived.

Statistics Canada reported Tuesday that the country’s gross domestic product contracted by an annualized rate of 0.5 per cent between April and June, driven by a continuing slump in the oil and gas sector. That followed a 0.8-per-cent drop in the first three months of the year, which Statistics Canada revised downward from 0.6 per cent…

(Editor’s note: Bold added for emphasis)

Canada is the United States’ largest trading partner, and it’s economy is closely linked to ours.

Hat tip to Bank of America Merrill Lynch economist Emanuella Enenajor for correctly-calling this downturn. From a July 4, 2015, Bloomberg News piece:

Sapped by the oil slide, Canada’s economy appears headed toward recession, economists warn — and one says we’re already there.

Emanuella Enenajor of Bank of America Merrill Lynch says the Canadian economy appears to have shrunk by 0.6 per cent in the second quarter after a drop of the same amount in the first, “suggesting a recession.”

Enenajor also predicts the Canadian dollar will tumble to under 77 cents U.S. by the end of the year.

Other analysts are being more cautious…

(Editor’s note: Bold added for emphasis)

The Globe and Mail reported the Canadian dollar ended Tuesday down 38 cents to 75.63 cents (U.S.).

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

McMahon, Tamsin. “Economy enters technical recession despite strong figures in June.” The Globe and Mail. 1 Sep. 2015. (http://www.theglobeandmail.com/report-on-business/economy/growth/canadas-economy-shrinks/article26172722/). 1 Sep. 2015.

“Canada in recession, heading to sub-77¢ dollar: analyst.” Bloomberg News. 4 July 2015. (http://ottawacitizen.com/news/national/canada-in-recession-heading-to-70%C2%A2-dollar-analyst). 1 Sep. 2015.

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Tuesday, September 1st, 2015 Currencies, GDP, North America, Recession

2 Comments to Canada Enters Recession

  1. Guess i wont be taking off to the Great White North anytime soon! But all 1980s SNL skit references aside, any word on projected duration of canadian situation? When the us will experiance a similiar fate? Good Day, aye!

  2. DPCR on September 3rd, 2015
  3. Thanks for the comment DPCR. “Any word on projected duration of canadian situation?” Haven’t really been following it too closely. Thought I’d mention it though due to the close economic ties between the Canada-U.S. Some are saying though that the downturn north of the border might be short-lived. From the AFP Tuesday:

    Analysts said the damage however could be limited.

    “Despite the weak start to the year, there is good reason to believe that the worst is over,” said TD economist Brian DePratto.

    DePratto cited the sharp increase in GDP in June, “providing positive momentum to start the second half of the year.” He predicted a “sharp rebound” in the third quarter with growth reaching 2.5 percent by year’s end…

    As to a U.S. recession? My personal belief is that it will be here soon enough. I’m going to have to go with investor/author/commentator Jim Rogers here. From Monday:

    We’ve had economic slowdowns every four to seven years since the beginning of the Republic. We’re going to have them again. It’s been six years since the last time. So start getting worried. Maybe it’ll be seven, maybe it’ll be eight years this time, but it’s going to come…

  4. Editor on September 3rd, 2015
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