Canada Entered Recession in First Quarter, Says C.D. Howe

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(Bloomberg) -- Canada officially entered a recession in the first quarter of 2020, according to the C.D. Howe Institute.

Preliminary data for the first quarter showed a deep contraction in economic activity coupled with a weakening labor market. This was enough to suggest the country fell into a recession, the report said.

The institute concluded that Canada hit the peak of the business cycle in February before a recession began in March, when strict social distancing measures and the closing of non-essential business took effect to slow the spread of coronavirus. C.D. Howe used preliminary GDP and employment data from Statistics Canada as of April 30 to make its assessment.

Members of the institute’s business cycle council said that “further GDP revisions will occur, which might impact the peak month,” according to the statement. “However, any revisions are extremely unlikely to be significant enough to alter the recession call for 2020: Q1.”

©2020 Bloomberg L.P.

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