TEC Canada is pleased to provide the Andersen Monthly Economic Report exclusively to our members. The former assistant chief of the Bank of Canada’s research department, Dr. Peter Andersen provides valuable economic insight to help you make better business decisions.

If a recession were coming before the 2020 U.S. Federal Election, it would be evident by now; in fact, the threat of recession before November 2020 has been reduced from 35% last month to 20%. This is largely thanks to both the U.S and China working towards “Phase 1” of negotiations in the trade war; tariffs were not raised as scheduled for October 15 and there are hopes the December 15 tariffs will not be raised as well. Attention is now focused on 2021, where several factors must be accounted for such as 2020 election results, economic policies, global developments and how financial markets respond. On a global scale, there is widespread slowdown – global GDP growth in 2019 will be the weakest since 2008-2009 and it is expected to be weaker in 2020.

Canada

  • The recent Bank of Canada Survey (Oct. 22), shows that half of the firms that responded, most outside the energy sector, plan to increase investment spending over the next 12 months. Similar to the U.S., the focus of the investments is in technology to improve productivity and reduce costs.
  • Outside the energy sector, the Canadian job market is healthy and there is a turnaround in housing construction.

U.S.

  • Unemployment is at a historical 50-year low at 3.6% – anyone who wants a job can get one.
  • Economic conditions are favourable across the U.S., even in energy-producing parts of the country. All regions with the exception of the Midwest show year-over-year double-digit percentage increases in new home sales.

International

  • There are three possible recession triggers: escalation in trade war, progressive political policies in the U.S. Federal Election and negative interest rates

 

ADDITIONAL RESOURCES

>Why Location Matters so Much for Trump-Xi Trade Summit
>Bank of Canada Holds Rates, Warns Economy Will be ‘Tested’
>Oil Prices Could go Down On Slowing Global Economy

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