The latest GDP report tracking whether we are experiencing growth or contraction of the Canadian economy showed things are slowing…and perhaps more than we think.
In broad terms, economists say we are pretty much flat-lined right now even though the official numbers showed the national economy expanded by an annualized rate of just over 2 percent in the second quarter of the year. And a report from the team at ScotiaBank says eighty percent of that growth can be attributed to government spending.
Hiring at the local level was up across the nation and back pay for large groups of civil servants in the East inflated the government contribution to the economy’s performance.
Private sector economic activity nationally – where all the wealth creation happens – was responsible for less than a quarter of the reported expansion.
And about the only good news in the report, according to ScotiaBank, is that all this new-found cash in the hands of public employees may well be spent between now and Christmas, stimulating the retail side of the overall economy.
