Amid challenging economic conditions, many Canadians are adjusting their spending habits, exhibiting behavior reminiscent of times of economic hardship in history. While Canada is not officially in a recession, with its jobless rate standing at 6.4% as of July, there are signs of economic stress. Despite experiencing weak growth in the past year, the Canadian economy has not contracted for two consecutive quarters, avoiding the technical definition of a recession.
Economists, including Charles St-Arnaud, have characterized the current economic climate as a “me-cession,” acknowledging the strain on individual households despite the overall resilience of the Canadian economy. Factors such as slowing growth and high household debt levels are contributing to the financial challenges faced by many Canadians.
The surge in population growth, particularly in the wake of the COVID-19 pandemic, has been a key factor preventing a more severe economic downturn. However, declining real GDP per capita and concerns about a productivity crisis indicate underlying challenges.
While some experts warn of potential recessionary risks, others remain cautiously optimistic, pointing to ongoing population growth and the resilience of the labor market as factors supporting economic stability. As Canada navigates through uncertainties, monitoring key indicators such as unemployment rates and household debt levels will be crucial in assessing the long-term economic outlook.
