Canada’s economy is likely in the early stages of a recession
The post Canada’s economy is likely in the early stages of a recession appeared on BitcoinEthereumNews.com. Canada is now sliding into the early stages of a recession, with new numbers and forecasts showing the economy shrinking and the labor market weakening. The warning comes from 34 economists surveyed by Bloomberg between May 16 and May 21, all pointing to back-to-back contractions in the country’s GDP. They expect a 1% decline in the second quarter of 2025, followed by a smaller 0.1% drop in the third quarter, enough to fit the classic definition of a recession. The heated trade conflict with the United States, fueled by President Donald Trump’s renewed tariff threats, has already thrown a wrench into Canada’s export flow. Those threats caused US importers to rush their Canadian orders earlier this year, front-loading demand and draining what would’ve been this quarter’s export activity. That led to a sharp projected 7.4% drop in exports, annualized. It’s hitting businesses hard, but economists believe shipments might climb slightly toward the end of the year. Job losses mount as central bank freezes Unemployment is also moving the wrong way. Forecasts suggest Canada’s jobless rate will jump to 7.2% in the second half of 2025. The combination of weaker trade and cautious domestic spending is dragging down hiring. Most of that pressure is falling on households, which are now dialing back consumption as income uncertainty grows. Inflation isn’t letting up either. The cost of goods and services is set to run above the Bank of Canada’s comfort zone — economists project 2.1% inflation in Q3 and 2.2% in Q4, just above the 2% target. That makes things more complicated for policymakers, especially when monetary options are limited. Right now, traders see less than a 30% chance of any interest rate move at the Bank of Canada’s next meeting in June. The bank’s governor, Tiff Macklem, said Thursday that “the more…
The post Canada’s economy is likely in the early stages of a recession appeared on BitcoinEthereumNews.com.
Canada is now sliding into the early stages of a recession, with new numbers and forecasts showing the economy shrinking and the labor market weakening. The warning comes from 34 economists surveyed by Bloomberg between May 16 and May 21, all pointing to back-to-back contractions in the country’s GDP. They expect a 1% decline in the second quarter of 2025, followed by a smaller 0.1% drop in the third quarter, enough to fit the classic definition of a recession. The heated trade conflict with the United States, fueled by President Donald Trump’s renewed tariff threats, has already thrown a wrench into Canada’s export flow. Those threats caused US importers to rush their Canadian orders earlier this year, front-loading demand and draining what would’ve been this quarter’s export activity. That led to a sharp projected 7.4% drop in exports, annualized. It’s hitting businesses hard, but economists believe shipments might climb slightly toward the end of the year. Job losses mount as central bank freezes Unemployment is also moving the wrong way. Forecasts suggest Canada’s jobless rate will jump to 7.2% in the second half of 2025. The combination of weaker trade and cautious domestic spending is dragging down hiring. Most of that pressure is falling on households, which are now dialing back consumption as income uncertainty grows. Inflation isn’t letting up either. The cost of goods and services is set to run above the Bank of Canada’s comfort zone — economists project 2.1% inflation in Q3 and 2.2% in Q4, just above the 2% target. That makes things more complicated for policymakers, especially when monetary options are limited. Right now, traders see less than a 30% chance of any interest rate move at the Bank of Canada’s next meeting in June. The bank’s governor, Tiff Macklem, said Thursday that “the more…
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