Canada’s economy stalled to end 2022, new data shows, but some economists say strong underlying demand could keep a recession at bay for longer or skirt the downturn entirely.
Statistics Canada said Tuesday that real gross domestic product (GDP) was “nearly unchanged” in the final quarter of last year, snapping a streak of growth for the preceding five quarters.
The actual GDP figures were a surprise to many economists, with the consensus expecting growth of 1.6 per cent in the fourth quarter. The Bank of Canada had expected growth of 1.3 per cent last quarter.
“It was a little bit shocking when we saw that,” says James Orlando, senior economist with TD Bank.
Orlando tells Global News that while flat growth might sound grim — he called it a “thud” of an economic release in a note to clients Tuesday — the details reveal more strength in the economy than the headline number suggests.
For instance, lower inventory accumulations were the main drag on GDP last quarter, StatCan said, following record growth for this segment in the second and third quarters of 2022.
Orlando says this is mostly an aftershock from the COVID-19 pandemic still reverberating through the economy. Businesses rushed to build their inventories back up after pandemic restrictions lifted — hence the record quarters — but pumped the brakes on production towards the end of the year when fears of a recession started to show on the horizon.
“For a business, you don’t want to be stuck with a lot of inventory if the economy slows down,” Orlando says.
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StatCan said businesses’ investments in machinery, equipment and housing declined in the final months of 2022, though Orlando says that was roughly in line with what economists expected.
Hidden in the flat GDP reading was solid consumer demand, Orlando noted, with spending here up two per cent annually.
“You’ve got to look past the inventories to see the underlying decent fundamentals in the economy, specifically on the consumer side,” he says.
Economic rebound to start 2023?
While Statistics Canada said real GDP declined by 0.1 per cent in December, the agency also said early indications suggest growth of 0.3 per cent month-to-month in January.
A few economic readings support the strong start to the year, Orlando notes. TD’s credit card tracker suggests Canadians kept spending in January despite expectations of an economic slowdown; a blockbuster jobs report for the month also supports continued demand from consumers.
Despite the Q4 “thud,” TD Bank expects growth in the first quarter of 2023 will rebound to 0.3 per cent annualized.
This pushes against thinking that Canada could start the new year in a recession, Orlando says. While TD is expecting an economic slowdown with negative growth in the third quarter, the bank is not currently calling for a recession in 2023.
Orlando says the strong jobs figures – the economy added 150,000 positions in January – are backing continued spending from Canadian households, which can in turn buoy GDP growth and push economic activity higher overall this year.
“It goes against the narrative of the hard landing,” he says.
“Everyone is expecting the slowdown in spending, the slowdown in the labour market, but the impact of the good data we’ve got could keep carrying through and keep this momentum going for a little while longer.”
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Not all economists are sure that a strong start to 2023 is enough to skirt a recession this year.
Stephen Brown, deputy chief North America economist at Capital Economics, acknowledges that the economy will probably grow “marginally” in the first quarter of 2023, but he doesn’t expect that momentum to last.
He points to the “temporary” nature of some of the factors fuelling the strong advance numbers for January, including relatively warmer weather across the country, which tends to be favourable for consumer spending.
Leading indicators such as business sentiment surveys suggest GDP is set to stagnate or outright decline through the middle of the year, Brown says.
“I think the risks of recession are still real and we are still forecasting a recession over the second and third quarters.”
Brown notes, however, that he doesn’t expect a large rise in overall unemployment in Canada during the downturn, as some sectors, such as high-touch services including travel and dining out, continue their long recovery from the pandemic.
The latest provincial outlook from The Conference Board of Canada released Tuesday meanwhile predicts the country will see very little improvement in the economy this year and at least one quarter of negative economic growth.
But the think tank also says the worst-case scenarios of a protracted recession or highly destabilized labour and capital markets are becoming less likely.
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Among the provinces, the report says Newfoundland and Labrador will have the fastest-growing economy this year as the Terra Nova offshore oil platform returns to production.
The Conference Board says the Alberta and Saskatchewan economies will also perform well in the near term, powered by the oil and gas sector and favourable outlooks in agriculture.
On the other end of the spectrum, the report says the economies of Quebec and New Brunswick will be nearly flat this year before returning to growth in 2024.
What does this mean for the Bank of Canada?
Orlando said the central bank’s governing council likely “feels vindicated” about its plans for a conditional pause in interest rate increases to assess whether their hikes to date have been effective enough in cooling down the economy and, by extension, inflation.
“The Bank of Canada doesn’t really have to do anything,” he says.
“Obviously, they’re going to be sitting, watching, making sure that things don’t really start to surge too much. But I think they’re going to be pretty content being where they are and just watching the incoming data.”
Brown says the Bank of Canada, which is set to announce its next interest rate decision March 8, finds itself in a distinct position from its peers in central banking. Price pressures are proving “a bit stickier than expected” in the U.S. and Europe he says, while the inflation outlook in Canada is “quite encouraging,” coming in lower than expected at annual rate of 5.9 per cent last month.
“Coupled with GDP being weaker than expected, that’s all consistent with the bank remaining comfortable with this conditional pause that it told us about in January,” he says.
The Bank’s policymakers are likely to remain cagey on timing for interest rate cuts, Brown says, with the upside risks to inflation keeping odds closer to additional hikes than reductions in the months ahead.
— with files from The Canadian Press
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Montreal Alouettes wide receiver Tyson Philpot has announced he will be out for the rest of the CFL season.
The Delta, B.C., native posted the news on his Instagram page Thursday.
“To Be Continued. Shoutout my team, the fans of the CFL and the whole city of Montreal! I can’t wait to be back healthy and write this next chapter in 2025,” the statement read.
Philpot, 24, injured his foot in a 33-23 win over the Hamilton Tiger-Cats on Aug. 10 and was placed on the six-game injured list the next week.
The six-foot-one, 195-pound receiver had 58 receptions, 779 yards and five touchdowns in nine games for the league-leading Alouettes in his third season.
Philpot scored the game-winning touchdown in Montreal’s Grey Cup win last season to punctuate a six-reception, 63-yard performance.
This report by The Canadian Press was first published Sept. 12, 2024.
MIAMI GARDENS, Fla. (AP) — Miami Dolphins quarterback Tua Tagovailoa sustained a concussion for the third time in his NFL career, leaving his team’s game Thursday night against Buffalo after running into defensive back Damar Hamlin and hitting the back of his head against the turf.
Tagovailoa remained down for about two minutes before getting to his feet and walking to the sideline after the play in the third quarter. He made his way to the tunnel not long afterward, looking into the stands before smiling and departing toward the locker room.
The Dolphins needed almost no time before announcing it was a concussion. The team said he had two during the 2022 season, and Tagovailoa was diagnosed with another concussion when he was a college player at Alabama.
Dolphins coach Mike McDaniel said Tagovailoa would get “proper procedural evaluation” and “appropriate care” on Friday.
“The furthest thing from my mind is, ‘What is the timeline?’ We just need to evaluate and just worry about my teammate, like the rest of the guys are,” McDaniel said. “We’ll get more information tomorrow and take it day by day from here.”
Some players saw Tagovailoa in the locker room after the game and said they were encouraged. Tagovailoa spoke with some players and then went home after the game, McDaniel said.
“I have a lot of love for Tua, built a great relationship with him,” said quarterback Skylar Thompson, who replaced Tagovailoa after the injury. “You care about the person more than the player and everybody in the organization would say the same thing. Just really praying for Tua and hopefully everything will come out all right.”
Tagovailoa signed a four-year, $212 million extension before this season — a deal that makes him one of the highest-paid players in the NFL — and was the NFL’s leading passer in Week 1 this season. Tagovailoa left with the Dolphins trailing 31-10, and that was the final score.
“If you know Tua outside of football, you can’t help but feel for him,” Bills quarterback Josh Allen said on Amazon following the game. “He’s a great football player but he’s an even greater human being. He’s one of the best humans on the planet. I’ve got a lot of love for him and I’m just praying for him and his family, hoping everything’s OK. But it’s tough, man. This game of football that we play, it’s got its highs and it’s got its lows — and this is one of the lows.”
Tagovailoa’s college years and first three NFL seasons were marred by injury, though he positioned himself for a big pay bump with an injury-free and productive 2023 as he led the Dolphins into the playoffs. He threw for 29 touchdowns and a league-best 4,624 yards last year.
When, or if, he can come back this season is anyone’s guess. Tagovailoa said in April 2023 that the concussions he had in the 2022 season left him contemplating his playing future. “I think I considered it for a time,” he said then, when asked if he considered stepping away from the game to protect himself.
McDaniel said it’s not his place to say if Tagovailoa should return to football. “He’ll be evaluated and we’ll have conversations and progress as appropriate,” McDaniel said.
Tagovailoa was hurt Thursday on a fourth-down keeper with about 4:30 left in the third. He went straight ahead into Hamlin and did not slide, leading with his right shoulder instead.
Hamlin was the player who suffered a cardiac arrest after making a tackle during a Monday night game in January 2023 at Cincinnati, causing the NFL to suspend a pivotal game that quickly lost significance in the aftermath of a scary scene that unfolded in front of a national television audience.
Tagovailoa wound up on his back, both his hands in the air and Bills players immediately pointed at him as if to suggest there was an injury. Dolphins center Aaron Brewer quickly did the same, waving to the sideline.
Tagovailoa appeared to be making a fist with his right hand as he lay on the ground. It was movement consistent with something that is referred to as the “fencing response,” which can be common after a traumatic brain injury.
Tagovailoa eventually got to his feet. McDaniel grabbed the side of his quarterback’s head and gave him a kiss on the cheek as Tagovailoa departed. Thompson came into the game to take Tagovailoa’s spot.
“I love Tua on and off the football field,” Bills edge Von Miller said. “I’m a huge fan of him. I can empathize and sympathize with him because I’ve been there. I wish him the best.”
Tagovailoa’s history with concussions — and how he has since worked to avoid them — is a huge part of the story of his career, and now comes to the forefront once again.
He had at least two concussions during the 2022 season. He was hurt in a Week 3 game against Buffalo and cleared concussion protocol, though he appeared disoriented on that play but returned to the game.
The NFL later changed its concussion protocol to mandate that if a player shows possible concussion symptoms — including a lack of balance or stability — he must sit out the rest of the game.
Less than a week later, in a Thursday night game at Cincinnati, Tagovailoa was concussed on a scary hit that briefly knocked him unconscious and led to him being taken off the field on a stretcher.
His second known concussion of that season came in a December game against Green Bay, and he didn’t play for the rest of the 2022 season. After that, Tagovailoa began studying ways where he may be able to fall more safely and protect himself against further injury — including studying jiu-jitsu.
“I’m not worried about anything that’s out of my hands,” McDaniel said. “I’m just worried about the human being.”
NEW YORK (AP) — When her husband turns on the television to hear news about the upcoming presidential election, that’s often a signal for Lori Johnson Malveaux to leave the room.
It can get to be too much. Often, she’ll go to a TV in another room to watch a movie on the Hallmark Channel or BET. She craves something comforting and entertaining. And in that, she has company.
While about half of Americans say they are following political news “extremely” or “very” closely, about 6 in 10 say they need to limit how much information they consume about the government and politics to avoid feeling overloaded or fatigued, according to a new survey from the Associated Press-NORC Center for Public Affairs Research and USAFacts.
Make no mistake: Malveaux plans to vote. She always does. “I just get to the point where I don’t want to hear the rhetoric,” she said.
The 54-year-old Democrat said she’s most bothered when she hears people on the news telling her that something she saw with her own eyes — like the Jan. 6, 2021, attack on the U.S. Capitol — didn’t really happen.
“I feel like I’m being gaslit. That’s the way to put it,” she said.
Sometimes it feels like ‘a bombardment’
Caleb Pack, 23, a Republican from Ardmore, Oklahoma, who works in IT, tries to keep informed through the news feeds on his phone, which is stocked with a variety of sources, including CNN, Fox News, The Wall Street Journal and The Associated Press.
Yet sometimes, Pack says, it seems like a bombardment.
“It’s good to know what’s going on, but both sides are pulling a little bit extreme,” he said. “It just feels like it’s a conversation piece everywhere, and it’s hard to escape it.”
Media fatigue isn’t a new phenomenon. A Pew Research Center survey conducted in late 2019 found roughly two in three Americans felt worn out by the amount of news there is, about the same as in a poll taken in early 2018. During the 2016 presidential campaign, about 6 in 10 people felt overloaded by campaign news.
But it can be particularly acute with news related to politics. The AP-NORC/USAFacts poll found that half of Americans feel a need to limit their consumption of information related to crime or overseas conflicts, while only about 4 in 10 are limiting news about the economy and jobs.
It’s easy to understand, with television outlets like CNN, Fox News Channel and MSNBC full of political talk and a wide array of political news online, sometimes complicated by disinformation.
“There’s a glut of information,” said Richard Coffin, director of research and advocacy for USAFacts, “and people are having a hard time figuring out what is true or not.”
Women are more likely to feel they need to limit media
In the AP-NORC poll, about 6 in 10 men said they follow news about elections and politics at least “very” closely, compared to about half of women. For all types of news, not just politics, women are more likely than men to report the need to limit their media consumption, the survey found.
White adults are also more likely than Black or Hispanic adults to say they need to limit media consumption on politics, the poll found.
Kaleb Aravzo, 19, a Democrat, gets a baseline of news by listening to National Public Radio in the morning at home in Logan, Utah. Too much politics, particularly when he’s on social media sites like TikTok and Instagram, can trigger anxiety and depression.
“If it pops up on my page when I’m on social media,” he said, “I’ll just scroll past it.”
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Sanders reported from Washington. David Bauder writes about media for the AP. Follow him at http://x.com/dbauder.
The AP poll of 1,019 adults was conducted July 29-August 8, 2024, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for all respondents is plus or minus 4.0 percentage points.
