David Doyle, head of economics at Macquarie, joins BNN Bloomberg to talk about his reaction to the Bank of Canada holding its key rate steady at five per cent.
Subscribe to BNN Bloomberg to watch more videos:
Connect with BNN Bloomberg:
For the latest news visit:
For a full video offering visit BNN Bloomberg:
BNN Bloomberg on Facebook:
BNN Bloomberg on Twitter:
BNN Bloomberg on Instagram:
BNN Bloomberg on LinkedIn:
—
BNN Bloomberg is Canada’s only TV service devoted exclusively to business, finance and the markets….(read more)
BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
If Unemployment rises more from here, that could signal Canada is already in a recession: Economist
The COVID-19 pandemic has unleashed uncertainty and economic turmoil around the world. Governments and businesses are grappling with the effects of lockdowns, restrictions, and an overall slowdown in economic activity. Canada, too, has not been immune to these challenges. As the nation tries to recover from the impact of the pandemic, economists and analysts are closely monitoring key indicators to assess the health of the economy.
One of the crucial barometers for determining the state of an economy is the Unemployment Rate. Unemployment is an indicator that reflects the number of people actively seeking employment but unable to find it. When unemployment is high, it suggests a lack of job opportunities and income instability for the population. Conversely, low unemployment indicates a healthy labor market and overall economic prosperity.
However, economists warn that if unemployment rises even further from its current levels in Canada, it could be a clear sign that the country is already in a recession. A recession is generally defined as a significant decline in economic activity for an extended period leading to reduced output, increased unemployment, and overall economic hardship.
The unemployment rate in Canada has already witnessed a significant spike due to the pandemic. Lockdowns and restrictions imposed to contain the spread of the virus led to job losses across various sectors, including hospitality, travel, tourism, and retail. The unemployment rate peaked at 13.7% in May 2020, the highest level seen in decades. Since then, there has been a gradual recovery, and the rate has been declining.
However, there are concerns that the recent surge in COVID-19 cases and subsequent restrictions may reverse the positive employment trend. Several Canadian provinces have reintroduced lockdown measures, leading to business closures and layoffs in affected sectors. This threatens to undo the progress made in recent months and push the unemployment rate higher once again.
Economists argue that if the unemployment rate continues to rise in the coming months, it could signify that Canada is already in a recession. A further increase in unemployment means businesses are unable to sustain their workforce, leading to job cuts and a decline in consumer spending. This, in turn, can create a vicious cycle of economic contraction, further exacerbating the recessionary conditions.
It is essential for policymakers and stakeholders to closely monitor the unemployment rate and take necessary measures to mitigate the impact of a potential recession. Government interventions, such as stimulus packages and support for affected sectors, can help stabilize the economy and protect jobs. Additionally, promoting job creation through investment in infrastructure and green initiatives can spur economic growth and counter the effects of a recession.
While the situation remains uncertain, it is crucial to remain vigilant and proactive in addressing the challenges posed by rising unemployment rates. Timely intervention and targeted policies can make a significant difference in reducing the impact of a recession and preventing long-term economic damage. By closely monitoring the unemployment rate and taking decisive action, Canada can navigate its way through these challenging times and pave the path for a robust and sustainable recovery.
Economist predicts that further increase in unemployment may indicate Canada’s recession is already underway appeared first on Inflation Protection.
