Economy is far from stalled
There`s a current of pessimism these days that seems to affect everything we hear about the economy.
The European credit crisis just won`t go away, some jittery types are worried about a new downturn in the U.S. economy and global stock markets have been feeling much gloomier. And now, we learn that the economy of Canada, one of the strongest in the world, has stalled.
It`s sort of true, but with the significant exception that nothing of the kind has really happened.
It`s sort of true because last week`s report on the broadest month-to-month measure of our economy, gross domestic product, did show it slowing to a halt in April (the figures are always a couple of months behind). And while this doesn`t really mean that economic growth just stopped, it could signal the possibility that it`s slowing.
The arithmetic worked like this: even though most industries kept on growing, one big one, retailing, suffered a big reversal, shrinking by a whopping 1.7 per cent.
Any single report, however, can`t paint an accurate picture of the whole economy.
If the economy had really stalled, for example, why is it that we saw a stunning 109,000 new jobs created in April? That was the biggest jump since 2002, and was no fluke. It was followed by another respectable gain of 25,000 jobs in May.
And if the economy was really grinding to a halt, why is it that Statistics Canada`s composite leading index, our best guide to where the economy is heading in coming months, kept growing in May at about the same pace it`s shown over the past year?
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