Economic Growth At A Shocking Standstill
Canadians are getting used to hearing about the ups and downs of the current recession. As soon as good news is reported, bad news seems to come out of nowhere and ruin the party. On some days, it appears as if the recession is ending. While on others, it seems like it is only getting worse.
The “recession roller coaster” is a constant and wild ride between good and bad news. So what type of news do we have in store for us today?
According to The Canadian Press, the Canadian economic recovery showed zero growth in the month of July. The 0.1 per cent increase in economic growth that was found in June encouraged hopes of the recession's demise. Economists predicted a July rebound between 0.5 and 0.7 per cent. So it appears as if it is bad news after all.
The economy did not appear to get any worse in July, but it didn't get any better either. There was literally no growth at all. So what does this mean?
Economist Douglas Porter of BMO Capital Markets considers this a “shocker”. “We're not talking about a shot across the bow of the optimists,” he said, “this is more like a torpedo through the hull.”
It is now assumed that Canada will experience a very long and drawn-out period of slow economic growth.
Says labour economist Erin Weir of the United Steelworkers union: “The figures provide a sobering reminder that the technical end of a recession may not imply a rapid recovery. Whatever path output takes, the labour market will be even slower to recover.”
Merrill Lynch chief economist Sheryl King was a bit more optimistic, predicting that August and September will display more promising results. She cites Toronto's city worker strike as a factor in the economic growth standstill of July.
According to The Canadian Press, however, “the biggest shocker may have been the big increase in manufacturing sales in July was not matched by production. After nine monthly declines, it advanced only 0.8%.”