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North of the Border Economics - 9/14/15

Canada is in recession.  The Canadian economy shrank for a second consecutive time during the second quarter according to Statistics Canada, putting America’s largest trading partner in recession for the first time since the two thousand eight/two thousand nine period when the meltdown in the U.S. housing market triggered a global credit crisis. 

Low oil prices have laid energy rich Alberta and Saskatchewan low and have induced many companies to slash investment.  As reported by Reuters, there are already indications that the Canadian economy is springing back to life.  The economy actually expanded by zero point five percent in June, indicating that the third quarter could be much better.  Moreover, some economists point out that while two consecutive quarters of contraction are typically considered the textbook definition of recession, that definition is simply too narrow. 

These economists would point out that Canadian unemployment remains relatively subdued at below 7 percent and that housing markets outside of Alberta have been reasonably strong, as have retail sales.  Canadian exports to the U.S. not related to energy are also strengthening, due to a relatively strong U.S. dollar and improving American economy.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.