Has the Canadian economy dodge the recession?

The Canadian economy is weak and struggling to find its foot as a trade war with the United States. But, the initial indicators show that it is against obstacles, dodging a lump sum recession.

“While the Canadian economy is under clear stress, the current contraction does not meet the definition of recession with data available with us,” said Jeremy Chronic, co-chairman of the CD Howe Institute’s Business Cycle Council.

The GDP number to be released on Friday will probably confirm that diagnosis.

The economy shrunk in the second quarter of this year. In April, May and June, GDP signed a 1.6 percent contract on an annual basis.

A recession is considered to a large extent when the economy contracts in a back-to-back quarter.

This week’s GDP number will take data for July and initial look in August. This means that two of the three months who built the third quarter will be on books.

And so far, economists believe that July and August will increase.

“Currently we (third quarter) are introduced to the actual GDP growth to be in the range of 0.0% -0.5% annual,” Dassjardin’s Deputy Chief Economist Randel Bartlet has written to customers in a note.

This growth, although it may be, comes as a result of exemption of exemption from American tariffs. Most of Canadian exports remain tariff free.

And after the initial shock in April, Vikas has started reversing only a little bit.

Manufacturing sales, wholesale trade, car and truck production were all in summer. Even Canada’s housing market is showing symptoms of life.

And this flexibility keeps the Canadian economy in a much better position, when the trade war began in the last winter. Even after this, the Bank of Canada was warning of a long and deep recession. Under its worst position, the Central Bank was concerned about a recession that could last a year and contract the economy up to three percent.

Look Interest Rates and Inflation: https://www.youtube.com/watch?v=3dqkra1jnjm

“In March, we still did not know if we would survive the complete anger of Trump’s tariff, and the fact that we did not hit everything with 25 percent tariff, it was a welcome to relief. And that is why we have managed to place our heads to some extent on the recession water,” said Avery Shenfeld, the chief economist of Cibc.

But Shenfeld says that Canada has “so far a recession.” He says that we will still see more data in the first quarter and he says that much depends on whether this small recovery in summer persists till the end of the year.

“If we get a small bounce back and then another decline, the economists would usually call that recession. So the jury is still out,” he told CBC News.

Bank of Canada is at least share due to cutting interest rates last week and why the federal government is planning a new expenditure in the next month’s budget.

Those types of measures do not come because things are going well. And even if the economy dodges the definition of a recession, it is not really the cause of a celebration for the Canadian people who are caught in the worst of the trade war.

The impact of Donald Trump’s efforts to re -organize the global economy is being felt the most in the regions of the country, which is the most exposed for trade – Windsor, Unemployment rate in Onts has climbed up to 11 percent.

Consumer and business confidence continued to decline, even though economic figures have shown a reversal.

“The economy can still be described as disappointing in this sense, even if we are growing, we are growing enough to go anywhere near full employment,” Shanefeld said.

One of the most important indicators to follow employment is. And remember, Canadian employment was not booming when the trade war was a hit.

The unemployment rate in 2022 was about five percent. By the end of 2024, it had climbed 6.7 percent as inflation in the economy and increased interest rates.

Today, it is 7.1 percent.

RBC Economics hopes that it will remain there by the end of this year. But Assistant Chief Economist Nathan Jenjen says that he does not think it will deteriorate. And he says, there is a beginning.

“Things are getting spoiled first, and then it takes some time before improving,” he said.

Like most economists, Jenjen says that it is still too early to win and declare the state unconditionally that Canada will survive a lump sum recession.

But what he is showing in the data is encouraged.

Even more importantly, he says that forecasts suggest that those shiny of hope in development and employment and exports should be constructed in the second half of this year and actually start feeling like a reversal during 2026.