‘Me-cession’: If the economy’s not tanking, why does it feel like it is?
Many Canadians today are feeling the pinch and reining in their spending, waiting out harsh economic winds in a pattern of behaviour typical of major recessions and financial crashes in history.
The difference this time around? Canada’s not (technically) in a recession.
Economists typically define a recession as two consecutive quarters of negative growth in real gross domestic product, often accompanied by a surge in unemployment.
While the jobless rate in Canada stands at 6.4 per cent as of July, 1.5 percentage points higher than record lows seen just two years earlier, the Canadian economy has largely kept its head above water lately.
“In the past year, we’ve been flirting close (to a recession) with some very weak growth, but we haven’t had those two quarters of contraction,” says Charles St-Arnaud, the chief economist at Alberta Central, which represents credit unions in the province.
In a recent report giving his mid-year outlook for the Canadian economy, St-Arnaud sought to classify the peculiar economic moment: it’s not a recession, but a “me-cession.”
His thesis is that while the abstract Canadian economy is largely holding up under the weight of slowing growth and restrictive interest rates, individual households are not getting ahead.
Essentially, despite what economists on Bay Street and headlines in the media might tell you, it’s frankly hard out there for Canadians. Whether you call it a recession or not, many consumers are struggling.
Polling from Ipsos on behalf of Simplii Financial published Tuesday suggests Canadians are indeed feeling the pinch.
The survey conducted in late June showed that 46 per cent of respondents said they’re losing sleep over their finances. Some 56 per cent are dining out less to
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