This story appeared in MarketWatch, a US business publication.
July 13, 2010, 9:16 AM ET.
Moody’s says Canada safe from double-dip recession.
It’s long been said that when the U.S. economy sneezes, Canada’s catches a cold. But these days, given recent upbeat economic news, more and more Canada watchers are saying, “What cold?”
Last week’s report that Canada’s resurgent economy created 10,000 more jobs — 93,000 in all — than its southern neighbors has focused a lot of U.S. media attention to just what’s going on in the Canadian economy.
MarketWatch’s Nick Godt, in his piece this week, noted that Canada’s “boring” regulated economy is working better than ours: “In Canada, ” he wrote, “where a regulated banking system and strong consumer protection laws helped the country weather the globe’s worst financial and economic crisis since the Great Depression, a vibrant private sector is hiring again.” He also noted that in Canada, “big money and business interests don’t have as much sway over policies as in the U.S.”
There’s been strong hiring in the service sector in Canada, and the left-leaning Huffington Post took note of this in a recent piece headlined, “Need a job? Try Canada, where hiring is booming and home prices are rising.”
“In terms of sheer job creation,” the HuffPo piece said, “June saw Canada create jobs at five times the rate predicted by economists.”
And now you can add Moody’s to the list of those who think Canada’s economic recovery is ongoing, even if the U.S. economy falls back into recession. Jimmy Jean, an economist at Moodys.com, says Canada’s economic recovery is safe, even if the U.S. suffers a double-dip recession.
“It is often thought that when the U.S. sneezes, Canada catches a cold,” he said in his report, “but with the shift toward a service-oriented economy over the last three decades, Canada has grown more immune to U.S. woes.”
Jean added: “The last two U.S. recessions are solid proof that Canada is now better able to withstand strong headwinds from the south. Not that they’ve decoupled altogether, but should a downside mild double-dip U.S. recession materialize, Canada’s recovery would very likely survive.”
In addition to Canada’s strong commodity sector, Jean said the success of Canada’s recovery is also because of policy makers acting quickly in the depth of the crisis, consumers shrugging off the recession and beginning to spend again, and Canadian employers believing in the recovery and hiring again.
Godt’s MarketWatch piece underlined this upbeat trend in Canada’s economy: “While Canada joined in the necessary global move to boost monetary and government spending to rescue the system over the past two years, its private sector is now able to take over the baton from the government.”
Godt also blasted the U.S. Senate’s refusal to extend unemployment benefits thusly:
“Isn’t blocking unemployment benefits for 2 million Americans a pretty good attempt to make sure consumer spending will drop, lead to less growth, and further job losses just in time for the midterm elections?”
It is inconceivable to this long-time Canada watcher that Canadian politicians — of whatever party — would ever refuse to extend these benefits to the unemployed. Many of my Canadian friends are shaking their heads in disbelief at the cynicism of U.S. Senators who voted against it.