Canada's annual inflation rate rose to 3.3 per cent in July, but one economics professor says last month's lower inflation number was likely an "illusion," and warns that the country may be about to enter a recession.
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BREAKING: Recession News LEARN MORE ABOUT: Bank Failures REVEALED: Best Investment During Inflation HOW TO INVEST IN GOLD: Gold IRA Investing
Expert: Canada likely entering a recession, or already in one The COVID-19 pandemic has caused havoc on economies around the world, and Canada is no exception. With businesses shuttered, unemployment skyrocketing, and consumer spending plummeting, experts are warning that Canada is likely entering a recession, if it hasn't already. David Rosenberg, a renowned economist, recently expressed his concerns that the Canadian economy is on the brink of a recession. He argues that the combination of the pandemic-induced shutdowns and the declining oil prices are significantly impacting the nation's economy. He also noted that the second quarter GDP could contract by more than 40%, which would be the steepest contraction in Canada's history. One of the key indicators of a recession is the rising unemployment rate. In April alone, Canada lost nearly 2 million jobs, pushing the unemployment rate to a staggering 13%. This is the highest unemployment rate since the Great Depression. Large sectors of the economy, including hospitality, retail, and manufacturing, have been hit hard by the lockdowns and are experiencing significant layoffs. Another factor that suggests Canada may be entering a recession is the steep decline in consumer spending. With businesses closed and people practicing social distancing, Canadians have drastically reduced their spending. A recent report by RBC Economics shows that consumer spending has fallen by almost 20%, the largest drop on record. This reduction in consumer spending has a ripple effect on businesses, leading to further layoffs and closures, exacerbating the economic downturn. Furthermore, Canada's housing market, which has been a significant contributor to the economy in recent years, is starting to show signs of strain. The Canadian Mortgage and Housing Corporation predicts a significant decline in housing prices, potentially dropping by 9-18% over the next year. A decline in housing prices not only affects the real estate sector but also impacts homeowners' ability to access credit, hindering domestic consumption further. The federal government has implemented various measures to offset the economic damage caused by the pandemic, such as the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS). However, these measures are temporary and may not be enough to fully mitigate a recession. As the restrictions are gradually lifted and the economy starts to reopen, the true impact on businesses and the overall state of the economy will become clearer. It is worth noting that while all indications point towards Canada entering a recession, the severity and duration of the recession are yet to be determined. The speed of the economic recovery will depend on several factors, including the containment of the virus, global trade, and government policies aimed at stimulating the economy. In conclusion, Canada is likely either already in a recession or on the verge of entering one. The combination of the COVID-19 pandemic, declining oil prices, rising unemployment, reduced consumer spending, and a weakened housing market are all signs of an economic downturn. As we move forward, it is crucial for the government to continue implementing policies that support businesses and individuals, with a focus on recovery and long-term stability. https://inflationprotection.org/expert-canadas-economy-likely-approaching-or-already-in-recession/?feed_id=139420&_unique_id=6510d911b2afd #Inflation #Retirement #GoldIRA #Wealth #Investing #businessnewscanada #canada #canadafinancialnewstoday #canadainflationjuly2023 #canadainflationnews #canadainflationrate #canadamortgagecrisis #canadamortgagerates #canadanews #canadarecession #CTV #ctvnationalnews #CTVNews #moshelander #news #recession #recession2023 #recessioncanada #recessioncanadarealestate #RecessionNews #businessnewscanada #canada #canadafinancialnewstoday #canadainflationjuly2023 #canadainflationnews #canadainflationrate #canadamortgagecrisis #canadamortgagerates #canadanews #canadarecession #CTV #ctvnationalnews #CTVNews #moshelander #news #recession #recession2023 #recessioncanada #recessioncanadarealestate
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