• 8 hours America Has Shed 500,000 Millionaires Since The Coronavirus Lockdown Began
  • 14 hours Trump Wants Another $2 Trillion Economic Intervention
  • 1 day The Surprising Businesses Deemed “Essential” During The Coronavirus Lockdown
  • 2 days Priceless Van Gogh "Spring Garden" Painting Stolen
  • 2 days Oil Falls To $20 For First Time In Nearly Two Decades
  • 2 days COVID-19 Could Be The End Of U.S. Coal
  • 2 days How Much Does Your Social Security Number Cost? $4 On The Dark Web
  • 4 days Silver Stocks Have Been Decimated In The Coronavirus Sell-Off
  • 4 days How Blockchain Tech Could Make Mergers And Acquisitions More Efficient
  • 5 days America’s Shortage Of This Metal Keeps Trump Up At Night
  • 5 days Bidet Bonanza: Defying The Toilet Paper Shortage
  • 6 days U.S. Auto Sales Fall By 75%
  • 6 days Violating Quarantine? Big Brother Is Watching
  • 7 days Does Gold Still Have Some Room To Run?
  • 7 days Major Acquisition Gives The World’s First Green Ride-Share Another Edge
  • 7 days U.S. Pushes For Digital Currency For Immediate Stimulus
  • 8 days The Impossible Challenges Created By Growing Population
  • 8 days Gold Skyrockets After Fed Pledges "Unlimited" Cash To Boost Economy
  • 8 days World’s Richest Lose $1 Trillion In Stock Market Rout
  • 9 days Gas Stations Shut Down In Venezuela As Coronavirus Crisis Intensifies
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Canada in Recession with Two Consecutive Quarters of Negative Growth

Yesterday, Yahoo!News reported Canada Officially Enters Recession.

Reeling from low oil prices, Canada fell into a recession in the first half of the year, government data confirmed Tuesday, putting Conservative Prime Minister Stephen Harper on the defensive in the run-up to October elections.

According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months.

It is Canada's second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis.

The data reflects fears about the health of the global economy as more gloomy evidence emerged of a slowdown in China, a main engine of growth worldwide.


Canada Recession Call Easy

Unlike the US, where the Fed pegged short-term interest rates so low that the yield curve cannot invert, calling the Canadian recession was easy.

On January 21, 2015 I wrote Canadian Recession Coming Up: Yield Curve Inverts Following Unexpected Rate Cut; Loonie at Six-Year Low.

"Coming Up" happened quickly.

On January 31, I wrote Canada in Recession, US Will Follow in 2015.

Following the rate cut, the yield curve in Canada inverted out to three years. Inversion means near-term interest rates are higher than long-term rates.

I saw no other person mention the inversion at the time. An inverted yield curve generally portends recession.


US Recession Call More Difficult

With constantly huge GDP revisions in the US, and with a yield curve that cannot invert, it's much tougher calling US recessions.

It remains to be see if a US recession starts this year or not. Spectacular auto sales and modest home building have kept the economy trudging along.

However, the US is not going to decouple from a slowing global economy forever. The idea is a silly as the 2008 notion that China would decouple from the US economy.

 

Back to homepage

Leave a comment

Leave a comment