"The recession is over"

[Baraka_Guru]

...in Canada!

Recession over, recovery ‘nascent,' central bank says in new outlook
Economy will grow this quarter, beginning long reconstruction of wealth destroyed by crisis, Bank of Canada says

Kevin Carmichael
Globe and Mail Update Last updated on Thursday, Jul. 23, 2009 10:49AM EDT

Canada's recession is over, and the country is beginning what will be a long reconstruction of the wealth destroyed by the financial crisis, the central bank said Thursday.

Gross Domestic Product will expand at an annual rate of 1.3 per cent this quarter, compared with an earlier forecast for a contraction of 1 per cent between July and September, the Bank of Canada said in its latest monetary policy report.

The dramatic shift is the result of stronger financial conditions, surprisingly high consumer and business confidence and a first-half contraction that was less severe than the economic catastrophe the central bank was bracing for when it last published its views on the economy in April.

If the Bank of Canada's new forecast proves correct, Canada's first recession since the early 1990's lasted three quarters, making it one of the shortest downturns on record.

Short, but severe.

Canada's economy was operating about 3.5 per cent below its production capacity, a hole that will take well into 2011 to fill, the central bank said. The automotive and forestry industries are restructuring, business investment is weak and unemployment continues to rise.

All that will make the recovery fragile, and explains why the central bank recommitted Tuesday to keep the benchmark lending rate at a record low of 0.25 per cent until the middle of next year.

“The recovery is nascent,” the Bank of Canada said. “Effective and resolute policy implementation remains critical to sustained global growth.”

The Bank of Canada's revisions are based on a domestic economy that has weathered the global recession better than policy makers expected and confidence that the rebounds in the United States and China are about to give a lift to exporters and commodity prices.

In April, the central bank predicted the economy would collapse by 7.3 per cent in the first quarter, a reading that instead came in as a 5.4 per cent contraction. The former would have been the worst on record; the later is the biggest decline since the recession of the early 1990s.

The central bank left its second-quarter outlook unchanged, predicting GDP shrank 3.5 per cent between April and June.

Consumer spending likely increased in the period, bringing forward purchases that policy makers originally assumed would occur later this year or even next, the report said. Household credit has remained surprisingly high, reflecting the central bank's efforts to lower borrowing costs to encourage purchases of houses and other big ticket items.

Over the months ahead, the Bank of Canada is counting on exporters to take over for consumers.

The U.S. economy is “at its trough,” and Canadian exporters will benefit disproportionately from the rebound because of their tight trade links with the world's largest economy, the Bank of Canada said. China's growth also is remarkably strong, which will provide a boost to commodity prices, the report said.

Still, risks remain.

The biggest threat to the Bank of Canada's outlook is the dollar, which has surged more than 5 per cent this month, jumping over 90 U.S. cents.

Policy makers worry about persistent strength in the currency because it makes Canadian exports less competitive abroad. The central bank's forecast for economic growth of 3 per cent in 2010 and 3.5 per cent in 2011 is based on an assumption that the loonie's value will average 87 cents over that period.

“A stronger and more volatile Canadian dollar could act as a significant drag on growth and put additional downward pressure on inflation,” the report said.

The central bank is mandated by law to keep inflation advancing at a pace of about 2 per cent a year. The Bank of Canada's inflation outlook remains largely unchanged from April. Policy makers predict the consumer price index declined in the second quarter, will drop 0.7 per cent this quarter and eventually reach 2 per cent in the second quarter of 2011.

Financial conditions also could take longer to return to normal, since unexpected losses at financial institutions could trigger another crisis of confidence in credit markets or bond traders could demand higher yields because of concern over rising budget deficits, the report said.

“Fragility in the global economy persists,” the central bank said. “Financial deleveraging by banks, households and firms is continuing, mirrored by ongoing adjustments on the real side of the economy.”

Recession over, recovery ‘nascent,' central bank says in new outlook - The Globe and Mail

Truth be told, however, Canada hasn't fared too badly compared to other developed nations. One of the biggest contributors to our stability has been our carefully regulated banking system, which has been lauded as a viable model for other economies. We didn't have the same mortgage crisis here because there are regulations preventing banks from lending to high-risk clients. Home buyers must meet minimum standards before they will get the funds.

They're saying that the rate of recovery will largely depend on how the U.S. fares, as we do a lot of trade south of the border. However, the growth in China presents many opportunities.

I sincerely hope the central bank is right. Most of us would be glad to see this as a short, albeit hard-hitting, recession. If our dollar remains stable (as opposed to going back to par with the U.S. dollar), then exporters at least should see a recovery in a matter of time.

Any news of a light at the end of the tunnel on your end?
How about indications that the contractions are starting to level off?
Anyone cynical about this news out of Canada?
Do you see this as a glimmer of hope, regardless of whether you're a Canadian?

[Rekna]

That socialist crap that Canada has is the worst! I mean they have socialized banks and socialized health care! It is horrible! How is an honest business man supposed to get rich ripping off a bunch of people when the government controls everything?

[Baraka_Guru]

Wow, I just clued in to the extent of the rhetorical use of "socialized" in American politics.

It's actually "regulated" banks and "universal" or "national" health care. But whatever; I get your point.

It's interesting to see, too, that Prime Minister Harper (a conservative) has been lauding the bank system abroad during the recession—a conservative in support of banking regulation, rather than a conservative pushing for its deregulation.

I mentioned this in another thread: I'm glad that conservatives in Canada are a different breed than in the U.S. (generally). They don't mind government intervention where it makes sense. Call them pragmatic.

[ASU2003]

Better not say that too loud, there may be a lot of illegal US immegrants coming to live in your country if things go to hell here.

[Baraka_Guru]

Well our liberal immigration laws are a huge contributor to our economic stability. Plus, I don't think the immigrants from the U.S. would be illegal per se; it depends.

If things do go quite to hell, we tend to be kinder to refugees than many. Though there are currently attempts to deport U.S. war resisters and their families. Of course, there are no guarantees.

At any rate, Canada's recovery will sync somewhat with the U.S. recovery. If the U.S. recovery is strong, I have little doubt that Canada will be vaulted into the top ranks of GDP in the G8.

[Charlatan]

There was a point, not that long ago, that the Harper government was pushing to liberalize (i.e. deregulate) the Canadian banking industry to bring it more in line with the US. From what I remember, the fact that they were in a minority government prevented them from pushing that through the commons.

Now they are trumpeting the regulation like it was theirs from the start.

[Baraka_Guru]

Good point, and it's the main reason why I don't mind minority governments. Sometimes getting little done in parliament can be a good thing.

[highdro69]

I'm surprised no one has mentioned, or even made a thread, about that article in Rolling Stone called The Great American Bubble Machine ( Inside The Great American Bubble Machine : Rolling Stone ). The reason I bring that up is because the American economic system is controlled by such a tiny and small group of people that their interests share NOTHING with the other 300 million people in this country. Canada, on the other hand, doesn't seem to have such a corrupt system.
Oh, and I'm about ready to start shooting up shopping malls the next time someone uses socialist to describe when the government props up businesses, often illegally, and passes laws empowering them at the detriment to the majority of other smaller businesses. Sorry kids, but that's called fascism. Doubletalk much, "liberal" media?

[The_Dunedan]

socialist to describe when the government props up businesses,

When those businesses, or portions thereof, come under Gov't ownership or control (State ownership of Means Of Production), Socialism is the accurate term. Whether those businesses were "helped" or not, they have been brought under full or partial Gov't ownership and control, ergo Socialism. Perhaps not fully Socialized, but the term is accurate.

[Baraka_Guru]

Originally Posted by The_Dunedan

When those businesses, or portions thereof, come under Gov't ownership or control (State ownership of Means Of Production), Socialism is the accurate term. Whether those businesses were "helped" or not, they have been brought under full or partial Gov't ownership and control, ergo Socialism. Perhaps not fully Socialized, but the term is accurate.

Actually, it's more accurate to call this state capitalism (public ownership).

[The_Dunedan]

"State Capitalism" is an oxymoron: Capitalism is predicated upon voluntary, mutually-beneficial exchange of goods and services. The State, by definition, is an instrument of coercion, ergo not "voluntary." Similarly, such ownership and subsidy insulates the company in question from Market forces such a boycotts, strikes, etc, thereby creating an unnatural market distortion. The above-posited scenario may involve a partially-private entity, but it is in no way Capitalistic.

[Baraka_Guru]

Originally Posted by The_Dunedan

The above-posited scenario may involve a partially-private entity, but it is in no way Capitalistic.

How can a partially private entity be in no way capitalistic?

And it's state capitalism in that it still operates as a private entity. Does it not?

[The_Dunedan]

it still operates as a private entity. Does it not?

No, it does not. Being fully or partially owned by the Gov't, it is no longer controlled by its' CEO, Board of Directors, or share-holders, and as anybody with pension funds in Chrysler recently discovered, can be redirected by Gov't fiat even when the directions involved are flatly illegal for a fully-private company to undertake. The Gov't controls the entity in question according to:
1: The degree to which the Gov't owns shares, and
2: The amount of that company's Short 'N Curlies the Gov't has clenched in its' fist (ie. how badly "in the hole" to the Gov't the company in question is).

Ergo, since it is controlled to some degree by the Government, and since some of its' funds go -to- that Government, it is a Public or partially Public entity, no longer Private. It can -loon- private, and in some ways -act- private, but it is not.

[Baraka_Guru]

Thanks for the explanation. The reason why I am reluctant to call it socialism is because it doesn't operate as a socialist system would (seeking equality among all its workers, etc.). Yet this isn't purely socialist, as it is operated under a primarily free-market system and it still allows private ownership. This goes back to what I've said in other threads: there is no such thing as a purely capitalistic economy. This is a prime example of what can happen in a mixed economy. It is a stabilizing measure.

[highdro69]

Originally Posted by The_Dunedan

When those businesses, or portions thereof, come under Gov't ownership or control (State ownership of Means Of Production), Socialism is the accurate term. Whether those businesses were "helped" or not, they have been brought under full or partial Gov't ownership and control, ergo Socialism. Perhaps not fully Socialized, but the term is accurate.

...But the gov't doesn't own them. The gov't just gave them a shit ton of money to keep on truckin. We, as the people and gov't, will get no return on said money. We will have no control over the goings ons of, say, Goldman Sachs or Boeing. Hell, we don't even know where a lot of the money went. I'm sorry, but your point is COMPLETELY and entirely null.

[The_Dunedan]

.But the gov't doesn't own them.

You haven't looked very hard at who ended up owning what shares of what, have you? The US Federal Gov't now owns shares in several banks and automotive manufacturing firms. Ownership of a Share is ownership of that percentage of that company, that's how shareholdsership works, and why shareholders get paid a dividend. Did you miss the "or portions thereof," or do you habitually not read the things you quote?

The gov't just gave them a shit ton of money to keep on truckin.

Umm no. Do a bit of reading on how many shares, as a percentage, the Gov't owns of the various firms which received bailout money, then get back to the discussion. Read into the way the Federal Gov't "Enron-ed" the comployees of Chrysler, or the people who held Chrysler stock as part of the 401K or retirement fund. They (the Federal Gov't) came into ownership of substantial percentages of various Corporations and companies during all this bailout folderol: as above, Gov't (State) ownership (control) of a company or Corporation (Means of Production) is Socialism. Hugo Chavez even congradulated Mr. Obama, during his weekly TV programme ('Allo, Presidente!), for nationalizing "No less than General Motors!"

I'm sorry, but your point is COMPLETELY and entirely null.

My point stands, as opposed to your point, which is a tilt at a straw man and is therefore meaningless.

[rofgilead]

The US GDP only fell 1% (before it gets revised..) this last quarter. Hopefully we are seeing the end of the fall, and loss of jobs here too.

[Willravel]

Congratulations, kanucks. Can we borrow the hockey stick you used to beat back laissez-faire corruption for a bit?

[ASU2003]

Originally Posted by highdro69

. We, as the people and gov't, will get no return on said money. We will have no control over the goings ons of, say, Goldman Sachs or Boeing. Hell, we don't even know where a lot of the money went. I'm sorry, but your point is COMPLETELY and entirely null.

I thought that the government was going to get some of the money back if things picked up.

[IdeoFunk]

Originally Posted by rofgilead

The US GDP only fell 1% (before it gets revised..) this last quarter. Hopefully we are seeing the end of the fall, and loss of jobs here too.

I don't know, despite all the hoopla in the news I'm still finding myself incredulous at best that the brunt of this is over. We just experienced consecutive quarters where there were huge losses in GDP and unemployment shot up drastically. A few slightly positive results at the onset of this quarter are really of minor importance I'd say. The economy has shrunk like nuts this past year and a half, and I think its effects have only started to be fully felt. It's going to be a long road back up, especially with such piecemeal economic growth. Further, I also find it dubious that the BOC's citing exports as being a key component of Canada's rebound, especially given the downward pressure in the USD to ours. Over the course of the near future, unless the USA is able to rebound even better than us, I feel like we'll be seeing manufacturers exporting to the US taking an even greater beating.

Anyways, for the sake of ongoing discourse here's another good update on the North American situation:

From economic trough, slow slog out begins
Barrie McKenna

Washington — Globe and Mail Update
Last updated on Sunday, Aug. 02, 2009 01:09PM EDT


The United States is finally nearing an end to the longest and deepest recession since the aftermath of the Second World War.

Its economy shrank at an annual rate of 1 per cent in the second quarter, marking the first time since 1947 that U.S. gross domestic product has declined for four consecutive quarters, the Commerce Department reported Friday.

But the decline was slightly smaller than most economists had expected – and much less severe than the revised 6.4-per-cent drop reported in the first quarter.

In Canada, however, the economy took a turn for the worse. May marked the 10th successive month of declining economic activity, shrinking 0.5 per cent under the weight of a dismal performance by the manufacturing sector.

That's the longest losing streak since Bob Dylan started making music and work began on the Berlin Wall (Statistics Canada didn't begin tracking monthly GDP until 1961).

Without the massive amounts of government cash, both the Canadian and U.S. economies would be in even worse shape. As grim as the numbers are, they do point to a looming recovery. That's a significant milestone for economists and investors, who look for inflection points in the economic cycle.

But the sheer depth of the recession means most people won't feel a recovery for quite some time. Particularly in the United States, the collapse in household wealth and the weak state of the labour market will weigh on growth – perhaps for years.

“The second quarter of 2009 may mark the end of the recession, [but] the road to recovery ... is a long one,” said Toronto-Dominion Bank economist James Marple.

U.S. household wealth has fallen by nearly $14-trillion, or 22 per cent, since mid-2007. Mr. Marple estimated this loss of wealth will subtract a full percentage from consumption for the next few years.

Speaking at the White House, President Barack Obama greeted the GDP figures as “an important sign that the economy is headed in the right direction.” He pointed out that the plunge in business investment appears to have stabilized – a precondition for companies to resume hiring.

“This means that eventually businesses will start growing and they'll start hiring again,” Mr. Obama said. “And that's when it will truly feel like a recovery to the American people.”

But he cautioned that the economy is still losing “far too many jobs.”

In June, the United States lost 467,000 jobs, pushing the unemployment rate to 9.5 per cent – five percentage points higher than when the recession began. Most economists expect the rate to shoot past 10 per cent later this year.

“America should start climbing out of it's the hole in the next quarter, but there's a lot more climbing to do,” CIBC economist Avery Shenfeld said in a report to clients.

The U.S. economy got a lift from government spending, which rose at an annual rate of 5.6 per cent in the quarter.

But just about every other component of GDP declined – including housing, business investment and, most tellingly, consumer activity. Consumption fell 1.2 per cent, even though personal incomes rose.

This suggests consumers continue to shore up their finances after a long, debt-fuelled purchasing binge.

Like the United States, the Canadian economy is largely on government life support. Of Statscan's 18 categories, six were higher in May than a year ago. Three of those were public administration, health service and education. The only private industry that expanded significantly from the previous year was finance and insurance, where output was 2.4 per cent higher than in May, 2008.

A new survey of factory owners reinforced Bank of Canada's outlook that while the recession is likely over, the climb back will be long.

The Canadian Manufacturers & Exporters said 53 per cent of its 583 association members surveyed said the value of current orders is lower than three months ago, compared with 51 per cent in June and 57 per cent in May.

Factory inventories still are high, and companies aren't planning to rehire any time soon.

Some 31 per cent of the respondents said their materials inventories were too high, compared with 6 per cent that said stockpiles were too low; 27 per cent said inventories of finished products were too high; 7 per cent that said they were too low.

With files from reporter Kevin Carmichael in Washington

[Baraka_Guru]

This is a good sign. Take it with a grain of salt, and this will likely be a long climb out of the hole....but it's a good sign, no?

Canada's economic growth offers hope

Deborah Baic/The Globe and Mail

GDP increased 0.1 per cent in June from May, the first rise in 11 months

Kevin Carmichael

Monday, Aug. 31, 2009 08:40AM EDT

Canada's economy grew for the first time in 11 months in June, providing a glimmer of hope at the end of a period that still marked the country's third consecutive quarter of economic contraction.

Gross Domestic Product increased 0.1 per cent in June from May, led by drillers of oil and gas, wholesalers and real estate agents, Statistics Canada reported Monday.

Over the second quarter as a whole, GDP shrank at an annual rate of 3.4 per cent, compared with a contraction of 6.1 per cent in the first three months of the year, as exporters continued to struggle to find markets amid the deepest global downturn since the Second World War.

Statscan's latest GDP figures reinforce the Bank of Canada's outlook. The central bank, led by Governor Mark Carney, predicted last month that Canada's first recession since 1992 would end this quarter and begin a long, slow climb out of the hole created by the financial crisis.

The Bank of Canada predicted that GDP would contract at an annual rate of 3.5 per cent in the second quarter and expand at a rate of 1.3 per cent in the third quarter. Mr. Carney said it will be at least a year before the economy is expanding at a pace that would cause him to worry about inflation because so much production capacity has been idled by the recession.

The central bank doesn't forecast monthly GDP, which Statscan calculates slightly differently than it does the three-month figure. The two numbers are close enough that economists use the monthly data as a guide to the more commonly used quarterly readings.

Statscan's calculation of a 6.1-per-cent rate of contraction in January through March was revised from an original estimate of 5.4 per cent, making the first quarter the weakest on record, according to Statscan data that dates back to 1961.

“The Canadian recession appears to have been deeper than initially thought, but June's monthly real GDP number does suggest that the recession did finally end in June,” Meny Grauman, an economist at CIBC World Markets in Toronto, observed in a note to clients.

Buoyed by rising commodity prices, the oil and gas extraction industry increased output by 1.3 per cent in June, easing the overall decline in the goods-producing industries to 0.6 per cent from a 1.6-per-cent drop in May.

Wholesale trade also increased 1.3 per cent in June. All service-producing industries, which make the greatest contribution to GDP, gained 0.4 per cent after generating no growth in May.

The second-quarter numbers back up the prevailing view in financial markets and among policy makers that the recession bottomed in the spring.

Exports of goods and services, which represent more than a third of Canada's $1.3-trillion GDP, dropped 5.2 per cent in the second quarter after plunging 8.7 per cent in the first three months of 2009.

With early signs of recovery in the United States and a burst of government-fuelled spending in China and other Asian countries this summer, the Bank of Canada and many economists expect Canada's trade prospects to pick up over the rest of the year.

That would dovetail with domestic demand that has held up surprisingly well during the recession, which first showed up in quarterly GDP figures at the end of last year.

Consumer spending, which equals more than 60 per cent of Canada's economy, rose 0.4 per cent in the second quarter after falling 0.3 per cent in the January-March period.

But much of that spending is related to the extraordinary efforts of Finance Minister Jim Flaherty and Mr. Carney to stimulate spending.

Residential investment increased 1.7 per cent in the second quarter, the first increase in more than a year, reflecting Mr. Flaherty's decision to enrich the government's subsidy for first-time home buyers and Mr. Carney's decision to drop borrowing costs to a record low.

Both Mr. Flaherty and Mr. Carney have warned that the rebound is fragile because it is almost entirely the result of stimulus measures. Government spending rose 0.8 per cent in the second quarter and a jump in personal income was led by a 23-per-cent increase in unemployment benefits, Statscan said.

“The Bank of Canada will likely be encouraged by indications that the economy is starting to pull out of recession and recent reports support the Bank's view that the economy will return to positive growth in the third quarter,” Dawn Desjardins, assistant chief economist at RBC Dominion Securities, said in a report. “However, to assure that this profile is realized, the Bank of Canada will likely keep monetary conditions very accommodative maintaining the overnight rate at the current 0.25 per cent.”

[spindles]

I saw on the news the other night that Oz didn't officially go into recession, so ours ended before it even started

[dlish]

spindles you're right in a sense. when i went back to oz i noticed that people were goinga bout doing what they always did. there wasnt the hoo-haa that everyone else i know around the world had.

i thibnk this may have to do with the stimulus packages the the government has introduced, which i think is working, but which wayne swann seems to want to take all the credit for.

regardless of who's actually responsible for australias' economy doing so well, i think its a good thing. they have the lowest unemployment in the western world, and confidence is pretty stable.

the case here isnt as stable. consumer confidence in the property market is shot, and dubai the city that once thrived on construction trying to recover from this.

its definately not over in dubai.

[spindles]

I gotta say I'm not a fan of the government stimulus handouts - I enjoyed getting the cash, but I think there are better ways to stimulate the economy - doing things like building projects and subsidising housing insulation are good stimulus items. Govt spends money which creates jobs and the extra jobs stimulate retail. Cash handouts just stimulates retail (or is used to lower debt).

Oz unemployment certainly rose and it is also harder to borrow money, but otherwise it is 'situation normal' here.

[Baraka_Guru]

The Canadian economy stalled in July, after a modest growth of 0.1 percent in June. Growth was expected to happen, so it seems the recovery is a bit more shaky than what people were hoping for. Well, with a 50%-some-odd drop in stocks over such a short period, what should we expect? If the recession is indeed over, maybe we should be expecting a bit of a trough for a while.

It's interesting though, because stocks have been rallying. I think at this point they've recovered about 50% back to the peak.

[Baraka_Guru]

After a few fits and starts, it's beginning to look more positive overall in the Canadian economy. Of course, things still aren't looking rosy in Ontario with the deficit burden and the recent announcement of freezes. Maybe things will soon look better than expected in Ontario as well if things continue as they are.

And now there are talks that Canada is likely to lead the way with raising interest rates.

Is Canada "moving from recovery to expansion"?

Is the U.S. soon to follow?

Job market and housing lead robust economic rebound
Real estate for sale in Toronto

The Globe and Mail

Growth forecasts upgraded after better-than-expected results in hiring, home sales and demand for new cars

Paul Waldie, Richard Blackwell and Bertrand Marotte

From Saturday's Globe and Mail Published on Friday, Mar. 26, 2010 10:47PM EDT Last updated on Saturday, Mar. 27, 2010 9:27AM EDT

The Canadian economy has caught fire much quicker than expected, with home building, hiring and even car buying surpassing the most optimistic forecasts.

While observers were once predicting 2010 would be a year of slow growth and high unemployment, the past few weeks have seen better-than-expected indicators on almost every economic front.

Auto sales, housing starts and job creation all came in higher than forecast in the past month, and Canada’s trade surplus reached its best level in a year in January. On Friday, the federal government said it recorded its smallest monthly deficit in more than a year in January, thanks to rising tax revenue due to the strengthening economy.

How much have things changed? A year ago, General Motors was at death’s door and facing bankruptcy. On Friday, the auto maker announced plans to hire workers and boost production in Canada because it can’t keep up with demand for some of its models.

“We’ve seen much more of a V-shaped recovery than the U-shape that I was expecting,” said Mike Barry, chief financial officer at Vecima Networks Inc., a Victoria-based company that makes telecommunications hardware, much of it for export.

One key indicator for Mr. Barry is the tone at trade shows. “It is much more positive. [People are] forward looking,” he said. “Last year people were saying, ‘We’ve got to hunker down and get through this.’ It was very restrained. Now that has changed quite dramatically.”

While the U.S. economy continues to recover slowly, Canada is moving ahead at a faster clip. Indicators here “have been on the fast track, suddenly, almost since the first day of March,” said Douglas Porter, deputy chief economist at the Bank of Montreal. “The domestic side of the economy has come flaring back almost to where it was before the recession began.”

Mr. Porter said Canada’s economy is still closely tied to the U.S., but the difference between each country’s domestic recovery has been unexpected. “It has been a surprise at how much Canada has been able to diverge from the U.S.,” he said.

Mr. Porter recently boosted his forecast for growth in Canada’s gross domestic product in the first quarter by a full percentage point to 4.7 per cent. He also now believes the economy will grow 3.2 per cent this year, rather than the 3 per cent he had previously predicted.

“The road is clear for the rest of 2010,” said Yanick Desnoyers, assistant chief economist at National Bank. “Canada is on the brink of moving from recovery to expansion.”

Two sectors have been driving the turnaround – the labour market and housing.

Unlike their U.S. counterparts, Canadian companies have been hiring. The unemployment rate dropped from 8.7 per cent last August to 8.2 per cent in February, and roughly 60,000 full-time jobs were created last month alone. While some of the hiring was due to government spending and the Vancouver Olympics, economists say the private sector played a significant role too.

As for home sales, Canada didn’t come close to experiencing the meltdown in real estate that occurred in the United States, and our housing market has been on a tear recently. Home sales, while slowing this year, jumped 44 per cent year over year in February, and the average price of all homes sold on the Multiple Listing Service was $335,655, up 18.2 per cent from a year ago.

Economists point out that housing is a key indicator because it feeds so many other parts of the economy, such as creating jobs for construction workers and increasing sales in home-furnishing stores.

And while the U.S. financial system is still recovering, money has been flowing steadily in Canada, thanks to sound banks and low interest rates. “The velocity of money in Canada, the speed at which money circulates in the economy, it did not go down in Canada,” Mr. Desnoyers said. “That means that private banks in Canada did their job, they continued to lend basically and it was about frozen in the United States.”

David Rosenberg, the chief economist at Gluskin Sheff + Associates who has been bearish on the economy, acknowledged that he has been surprised by the rebound. “The reality is that we do have a V-shaped recovery in Canada,” he said. “These numbers have come in far greater than my expectations and even the most bullish prognostications.”

Mr. Rosenberg added that “there are still legitimate question marks over the outlook for the second half of the year.” He cited the still-weak U.S. economy and the impact the rising Canadian dollar will have on exports. “We will only diverge from the U.S. for so long,” he said.

But for now, many companies are enjoying the unexpected rebound and feeling better about their prospects.

“We’re going to have a good year,” said Harvie Andre, chief executive of Calgary-based Wenzel Downhole Tools Ltd., which sells drilling equipment around the world.

He said signs of the recovery go beyond his company and range from the restart of mothballed condominium projects in Calgary to the booming profits at yoga wear maker Lululemon Athletica Inc. “If you’re worried about the future,” he said, “you can postpone a new pair of yoga pants.”