Double Whammy, Eh Hoser?
From the Great White North...
The U.S. economy, and in turn Canada's, will be hit by the double whammy of a deep slump in North American auto production and the correction in the U.S. housing market.
According to separate reports by two Canadian banks and a domestic economic think-tank, the Scotiabank and TD Bank reports note the following:
''We estimate that lower vehicle production alone will trim more than half a percentage point off U.S. economic growth in the second half of 2006.
The question is not whether the housing market correction will dampen U.S. economic growth over the next year, it will.
There is significant risk of a recession in 2007 or early 2008, however, the most likely outcome remains a ... slowdown.''
The spectacular gains in U.S. housing prices over the past few years have come to a grinding halt, forcing households to curtail spending sharply,''
Weaker housing demand will have a ripple effect across the American economy, yet the United States will not fall into recession next year because of strong growth in business investment and exports.''
The Conference Board of Canada forecasts U.S. growth would slow to just 2.2% in Q4 and continue that anemic pace next year.
The board also predicts Canada's economic expansion will be sustained by ''strong consumer spending, buoyant capital investment and stable government spending.''
The TD Bank's optimism that the North American economies will merely suffer a slowdown is based on its readings of other economic indicators, including relatively low interest rates and inflation, and healthy corporate balance sheets, none of which are pointing to recession.
Optimism is necessary, pessimism is healthy, realism is even better... and in tommorows follow up you will get a small dose of it... stay tuned.
The U.S. economy, and in turn Canada's, will be hit by the double whammy of a deep slump in North American auto production and the correction in the U.S. housing market.
According to separate reports by two Canadian banks and a domestic economic think-tank, the Scotiabank and TD Bank reports note the following:
''We estimate that lower vehicle production alone will trim more than half a percentage point off U.S. economic growth in the second half of 2006.
The question is not whether the housing market correction will dampen U.S. economic growth over the next year, it will.
There is significant risk of a recession in 2007 or early 2008, however, the most likely outcome remains a ... slowdown.''
The spectacular gains in U.S. housing prices over the past few years have come to a grinding halt, forcing households to curtail spending sharply,''
Weaker housing demand will have a ripple effect across the American economy, yet the United States will not fall into recession next year because of strong growth in business investment and exports.''
The Conference Board of Canada forecasts U.S. growth would slow to just 2.2% in Q4 and continue that anemic pace next year.
The board also predicts Canada's economic expansion will be sustained by ''strong consumer spending, buoyant capital investment and stable government spending.''
The TD Bank's optimism that the North American economies will merely suffer a slowdown is based on its readings of other economic indicators, including relatively low interest rates and inflation, and healthy corporate balance sheets, none of which are pointing to recession.
Optimism is necessary, pessimism is healthy, realism is even better... and in tommorows follow up you will get a small dose of it... stay tuned.
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