The Canadian economy shrank in the second quarter, putting the country in a recession for the first time since the financial crisis of 2008-2009, Reuters reports.
Gross domestic product contracted at an annualized rate of 0.5 percent in the second quarter, according to Statistics Canada. While this was better than the original forecast, the first quarter’s contraction was revised to be steeper than first reported, now at 0.8 percent. Unemployment remained relatively unchanged at 6.8 percent.
A severe drop in oil prices, which caused several companies to halt business investment, triggered the shrinking of the economy in the second quarter. U.S. crude oil prices are currently trading at roughly $47 per barrel, less than half of last year’s level of $107 per barrel. A fall in global demand, particularly from China, has pushed prices down.
However, a 0.5 percent growth in June, the first growth in six months, has led many to believe the recession will be short-lived and the country will have a better third quarter.
"Despite the technical recession materializing, it does look like the Canadian economy is jumping back, is rebounding strongly in the third quarter," said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.
ADP employment report
Private sector employment increased by 190,000 jobs on a seasonally adjusted basis in August, a marginally higher report than the 185,000 jobs in July but still not quite back to the over 200,000 numbers the report experienced for much of 2014.
This is the third highest number of job additions in 2015, behind May and June, which added 197,000 and 231,000 jobs, respectively.
Small businesses contributed the largest number of jobs this month, adding 85,000 jobs in August, up sharply from the 59,000 jobs added in July. Medium businesses were not far behind at 66,000 jobs, a small increase from the 61,000 added in July, and large businesses added 40,000 jobs, falling from 53,000 added in July.
Service-producing employment rose by 173,000 jobs in August, a marginal increase from 170,000 in July. Professional/business services added 29,000 jobs, a huge leap from 3,000 added in July. Trade/transportation/utilities employment grew by 28,000 jobs, down from 34,000 last month. Financial activities added 13,000 jobs, an improvement from 10,000 jobs added in July.
Good-producing employment rose by 17,000 jobs in August, an over 100 percent increase from 7,000 jobs in July. The construction industry added 17,000 jobs in August, up from 15,000 in July, and manufacturing added 7,000 jobs in August after only adding 1,000 in July.