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.

Just Posted

Despite warnings, plenty of temptations to thieves left in vehicles

Lock It or Lose It campaign still finding plenty of valuables left in plain sight

WATCH: Notley invites central Albertans to “team up” with New Democrats for equitable, prosperous future

NDP leader lashes out against her rival, Jason Kenney, calling him a cheater

Red Deer sees highest rate of fentanyl deaths

47 fentanyl-related deaths in 2018

Why Solar: Canada needs to get its collective house in order

Canada needs to get a grip. The country has one of the… Continue reading

Gardening: Take care when making plant purchases

After a cold February, the longer sunny days and warmer weather triggers… Continue reading

Canadian pair fifth after short program at figure skating worlds

SAITAMA, Japan — Canada’s Kirsten Moore-Towers and Michael Marinaro are fifth after… Continue reading

Director Kim Nguyen tackles financial ‘madness’ in ‘The Hummingbird Project’

TORONTO — As Quebec filmmaker Kim Nguyen tells it, “The Hummingbird Project”… Continue reading

What Disney gets as its $71.3B buy of Fox assets closes

It’s finally complete. Disney closed its $71 billion acquisition of Fox’s entertainment… Continue reading

Opinion: Let’s be heard ‘loud and clear’ during provincial election campaign

By David Marsden During the banquet for Sunday’s Boston Bruins alumni game,… Continue reading

Documentary on Colten Boushie case to open Toronto’s Hot Docs festival

TORONTO — A film examining the case of a young Indigenous man… Continue reading

Most Read