The national economy appears to be coming to a crossroad.
We got the updated GDP numbers on Friday. They showed the Canadian economy grew by one-tenth of a percentage point in February. That is down considerably from January.
The forecast for March’s numbers suggest an even deeper slowdown, something that is likely to continue into the summer and fall. April, for example, is likely to be a down month because of the federal workers strike reducing the number of hours being worked.
The situation has the economists at RBC predicting a mild recession.
About the only thing giving the economy a boost in February was construction.
Consumer spending was down as higher interest rates are now biting into discretionary spending decisions, something RBC figures will keep the Bank of Canada on the sidelines until the end of the calendar year when it comes to raising interest rates any further. But inflation is persisting so it is too early to think about lower interest rates earning any attention.
