Recovery hopes shot down by new data

OTTAWA — Hold off on the talk about “green shoots” and an economic recovery being just around the corner.

OTTAWA — Hold off on the talk about “green shoots” and an economic recovery being just around the corner.

New data Wednesday indicated that although there is reason to believe the economy is no longer in free-fall, it is still sliding toward a bottom not yet visible.

Retail sales in the United States fell a surprising 0.4 per cent in April, far worse than the flat reading economists had anticipated, confirming that the American shopper is still dormant.

In Canada, credit rating agency DBRS said conditions for domestic airlines have been typical of past recessions, with first-quarter passenger traffic down three to six per cent.

This follows Tuesday’s mixed report on bankruptcies — consumer defaults alarmingly up; business insolvencies unexpectedly down.

One harbinger of global economic activity is demand for energy, and despite all the talk of a rebound in China and better conditions in the United States, that appears to be muted, according to the Organization of Petroleum Exporting Countries. OPEC has lowered its estimate for world oil consumption for the ninth consecutive month, saying demand will fall by almost two per cent this year.

Analysts believe conjecture about green shoots — delicate signs of revival sprinkled among the economic desolation — has overshadowed the weaknesses that remain in the economy and the risk that conditions could deteriorate further.

“I think it was the combination of the stock markets doing so well in March and April, and then we had that good employment report on Friday; people were getting ahead of themselves,” said Dale Orr, a Toronto economist and consultant.

“I still say it’s going to be the fourth quarter until we see any growth at all.”

Even this forecast, which coincides with the Bank of Canada’s projection, comes with caveats, including that there won’t be another major financial-sector failure, or that the broken-down jalopy that is the North American auto sector won’t finally expire.

Hard data over the past months, even numbers that are cited as encouraging, are consistent with a severe recession, not growth, said CIBC economist Meny Grauman.

Often-cited retail sales figures earlier in the year appeared solid only in contrast to the “horrid” results of the previous months, he said.

And while housing markets are showing signs of nearing bottom, there is scant evidence of a rebound in either prices or construction.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer up to four active COVID-19 cases

Province announced 77 new confirmed cases across Alberta Friday

Red Deer woman loses student visa, ‘has no choice but to leave’ Canada

Victoria Forschle and her family came to Canada in 2008

Agriculture trade show is a must, says Red Deer chamber

Red Deer & District Chamber of Commerce promotes trade show

$21M of improvements to be made to Olds College

More than $21 million in improvements will be made to Olds College,… Continue reading

‘Are you wearing protection?’: Daters struggle with COVID-19 compatibility

WASHINGTON — A federal judge in Baltimore on Friday struck down a… Continue reading

Red Deer sports groups sticking to racially sensitive names for now

Professional sports teams Edmonton Eskimos and Washington Redskins are reviewing their team names

Genetic non-discrimination law is constitutional, Supreme Court says

OTTAWA — In a split decision, the Supreme Court of Canada has… Continue reading

Quebec arts scene shaken by wave of anonymous sex misconduct allegations

MONTREAL — Quebec’s arts scene is being rocked by a wave of… Continue reading

Conservatives say police should be called in to investigate WE charity scandal

OTTAWA — Calls for independent review of the Liberal government giving a… Continue reading

Montreal Impact lose 1-0 to New England at MLS is Back Tournament in Florida

KISSIMMEE, Fla. — Argentine forward Gustavo Bou scored early in the second… Continue reading

Baseball is back in Japan, and so are fans in the stadiums

TOKYO — Japan’s professional baseball league opened the delayed season three weeks… Continue reading

Depp says feces in bed was last straw in marriage to Heard

LONDON — Johnny Depp said in a London court on Friday that… Continue reading

Most Read