Canada is in recession. The Canadian economy shrank for a second consecutive time during the second quarter according to Statistics Canada, putting America’s largest trading partner in recession for the first time since the two thousand eight/two thousand nine period when the meltdown in the U.S. housing market triggered a global credit crisis.
Low oil prices have laid energy rich Alberta and Saskatchewan low and have induced many companies to slash investment. As reported by Reuters, there are already indications that the Canadian economy is springing back to life. The economy actually expanded by zero point five percent in June, indicating that the third quarter could be much better. Moreover, some economists point out that while two consecutive quarters of contraction are typically considered the textbook definition of recession, that definition is simply too narrow.
These economists would point out that Canadian unemployment remains relatively subdued at below 7 percent and that housing markets outside of Alberta have been reasonably strong, as have retail sales. Canadian exports to the U.S. not related to energy are also strengthening, due to a relatively strong U.S. dollar and improving American economy.