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article imageC.D. Howe — Canada entered recession in first quarter

By Karen Graham     May 1, 2020 in World
Ottawa - In a report released Friday, the C.D. Howe Institute’s Business Cycle Council says Canada has entered a recession due to the economic devastation caused by the COVID-19 pandemic.
In the report, the council concluded that Canada hit the peak of the business cycle in February before steps were taken to slow the spread of the coronavirus. This brought the economy to a standstill, reports the Globe and Mail.
C.D. Howe used preliminary GDP and employment data from Statistics Canada as of April 30 to make its assessment. “further GDP revisions will occur, which might impact the peak month,” according to a statement by the council. “However, any revisions are extremely unlikely to be significant enough to alter the recession call for 2020: Q1.”
A commonly used definition for a recession is two consecutive quarters of negative quarter-over-quarter economic growth. The Council defines a recession as a pronounced, persistent, and pervasive decline in aggregate economic activity.
The March jobs report showed more than a million jobs were lost in the month, while a preliminary estimate by Statistics Canada suggests the economy contracted by nine percent in the same month, reports The Star.
“The council agreed the magnitude of the contraction makes it extremely unlikely that any future adjustments will overturn the conclusion of a major drop in economic activity in the first quarter,” the council said.
The official estimates of GDP for March and the first quarter of 2020 will be released on May 29.
More about coronavirus, CD Howe, Canada, Recession, economic activity
 
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