“So what we're seeing more so than big layoffs and a rise in the unemployment rate, is maybe that the quality of employment is changing. “What's different from this situation compared to more typical recessions is that we are seeing layoffs in some sectors, but there are still other areas of the economy that are trying to rehire and get back to their full capacity, because they weren't able to do that after the pandemic because of labour shortages,” he said. However, layoffs have been uneven across sectors so far, he said. Grantham says CIBC expects the job growth to be sluggish and to trail population growth. “The economy is very weak, we are stalling at a time where we haven't really felt the biggest impact yet of some of these past interest rate hikes,” Grantham said.Īt the same time, he cautioned against reading too much into the estimate, noting it could be revised up when the final data is released.Ī recession is often associated with layoffs and a rise in unemployment as business conditions worsen. Grantham says it's clear Canada is “skirting a recession.” “The declines are still very small,” said Nathan Janzen, assistant chief economist at RBC. “I don't think they are going to hike interest rates again, given how weak the economy is,” said Andrew Grantham, CIBC's executive director of economics.Īugust marked the second consecutive month where growth remained flat, and early datasuggests the economy continued that trend in September.įor the third quarter, Statistics Canada's preliminary estimate suggested the economy shrank at an annualized rate of 0.1 per cent, which would follow a contraction in the second quarter.Ī technical recession is defined as two consecutive quarters of negative growth, but economists generally look for broader-based weakness to qualify a downturn as a recession. The weaker-than-expected data is reinforcing forecasters' expectation that the Bank of Canada is done raising interest rates and sparking recession chatter. Meanwhile, a preliminary estimate is tracking a small contraction in the third quarter. The federal agency released its August gross domestic product report on Tuesday, which shows the Canadian economy remained flat in the month. OTTAWA - The Canadian economy may have entered a technical recession as high interest rates weigh on consumer spending, preliminary data from Statistics Canada suggests.
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