Canada's jobs market is setting records. So why are people talking about a recession?
CBC
Canada's unemployment rate has never been this low. Employers are adding jobs and hiring what few workers haven't already been gobbled up. GDP growth in Canada is also better than any other G7 country.
Yet the economic narrative in this country is dominated by doom and gloom.
In fact, results from Google Trends show that searches for the word "recession" have dramatically risen in Canada, even while the economy continues to churn out growth.
"I think it is a little bit overblown," said Pedro Antunes, chief economist at the Conference Board of Canada. "I think, obviously, the bad news tends to get more traction in the discussion out there."
But, he says, the economy is in really good shape.
In fact, Canada's economy is benefiting from some of the very things that worry consumers — even as it pinches your pocketbook.
High global oil prices are pushing up your cost at the pumps, but it's acting as a boost to Canadian GDP. Sky-high food prices mean you're paying significantly more at the grocery store, but they're driving up the revenue of Canada's enormous agriculture industry.
Still, fear and uncertainty around fast-rising inflation is driving negativity, said Antunes, noting that sentiment matters, because negative expectations can quickly become "self-fulfilling prophecies."
"If enough people believe the economy is going to tank, and enough people believe equity markets are going to tank, and enough people believe the housing market [is going to tank], then they will," he said.
Consider this chain of events: Consumers are worried about a potential recession. They scale back on their purchases. They decide to save a bit of money instead of buying that new appliance. Or car. Or jacket.
If you scale that out over Canada's population, those worries about a downturn can actually cause the economy to slow even more quickly.
Just last month, Bank of Canada governor Tiff Macklem highlighted his concerns that eroding consumer confidence could cause real damage.
"If the economy slowed sharply and unemployment rose considerably, the combination of more highly indebted Canadians and high house prices could amplify the downturn," he said.
So the Bank of Canada is just as worried as you are — but it also has a lot more data than we do.