While the recession has hit home for me of late, it’s still hard to tell how bad things are out there. It’s especially hard to read if, like many others, you are avoiding shopping quite as much as you usually do: this means you miss the note of desperation in the continued discounting, the sales that have lasted since well before Christmas. Even Holt Renfrew is now well into the game now, offering a gift card worth ten percent of spending over $250.
But recent data from the Bank of Canada is evidence that not only have the wheels have come off the Canadian economy, but the wheel-less vehicle that remains is tumbling into a ditch.
First, look beyond headlines about the bump in March retail sales in Canada. From a TD Economics note on the new numbers:
So far, peak to trough, retail sales have fallen three times as fast as the 2.1% decline during the 1990’s recession. Moreover, the stronger than expected retail sales were driven price effects. Stripping
out prices, sales were down 0.3%.
And forget about Canada — with its magic banks that will save us from everything — suffering a mild sideswipe while the rest of the world suffers. This kitten has some serious claws. The contraction in the first quarter is just astonishing:”
The economy shrank at an annual rate of 7.3 per cent in the first three months of 2009, a dramatic collapse that the central bank said will force it to adopt “unconventional” methods of monetary policy making if the freefall continues.
I have to repeat this again: Seven-point-three per cent. That’s approaching Russia territory.
And am I the only one who finds the phrase ‘”unconventional” methods of monetary policy making” profoundly disturbing?