The Canadian economy has been sluggish and entirely unpredictable. In the fourth quarter of 2018, Canadian gross domestic product (GDP) advanced a miserly 0.4%. In September, November, and December, GDP contracted 0.1%. 2019 isn’t looking too much better. In January, GDP grew just 0.3%. In March, the Canadian economy lost 7,200 jobs—its first employment drop in seven months. Is this just a blip or is the Canadian economy showing signs of really slowing down?
New Jobs Added, But Is It Enough?
Statistics Canada announced that the Canadian economy unexpectedly lost 7,200 jobs, ending a seven-month winning streak. The number of people working in the private sector fell by 17,300. Meanwhile, the government added 4,200 jobs to its payroll and the number of self-employed Canadians rose by 6,000.1
Economists were actually expecting the Canadian economy to add 3,000 jobs. But their optimism may have been a little misplaced. Between August 2018 and February 2019, the Canadian economy added 290,000 jobs; that’s the largest six-month increase since 2002.
Those job gains though came at a time when economic indicators showed production was stalling, which was a result, in part, due to falling oil prices.
Some economists have noted that the strong jobs data had to slow down at some point and that it’s not indicative of broader economic slowdown. But the heads of some of Canada’s biggest banks are painting a more bearish picture.2
Economic Problems Still Need Fixing
Bharat Masrani, President and CEO of Toronto-Dominion Bank told shareholders at its annual meeting in late March that he expects the Canadian economy to face “constrained growth” in 2019. He noted that there are economic “problems that still need fixing,” including oil export, provincial trade barrier, Canada’s housing supply, and a lack of infrastructure projects.
Meanwhile, Dave McKay, President and CEO of Royal Bank of Canada told shareholders at its annual meeting that the nation has lost “momentum.” He also said that investors are concerned about “Canada’s falling position in the world.”
Those concerns at not misplaced. Canada exports of non-energy goods is stagnant and there is a “growing crisis” in the resources sector. “Our capacity to grow and advance our economy is stalling,” he said.
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No matter what the economic indicators suggest, there will always be differing opinions on how the Canadian economy, stock market, and Canadian dollar are going to perform. But even the most bullish of investors have to concede that the outlook for the Canadian economy looks sluggish. That doesn’t mean investors should run for cover and protect their portfolio. Quite the opposite. The trading experts at Learn-To-Trade.com can teach you how to make money no matter what the Canadian or global economy is doing.
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Sources:
George Karpouzis is the co-founder of Learn-to-Trade and has been personally providing education and mentoring to over 3000 members since 1999. George has been trading in the stocks, options, futures and forex markets using technical analysis since 1986. With the help of advancements in trading technology the Learn To Trade program is now accessible worldwide. His background and passion for teaching brings an invaluable asset to our members. George is constantly striving to improve the program content and develop new strategic relationships for the benefit of the members.
The Canadian economy has been sluggish and entirely unpredictable. In the fourth quarter of 2018, Canadian gross domestic product (GDP) advanced a miserly 0.4%. In September, November, and December, GDP contracted 0.1%. 2019 isn’t looking too much better. In January, GDP grew just 0.3%. In March, the Canadian economy lost 7,200 jobs—its first employment drop in seven months. Is this just a blip or is the Canadian economy showing signs of really slowing down?
