The Great Depression 2 is upon us!

I am sure there has never been a time in Canada where we have so eagerly anticipated a recession.  First there was the cataclysmic labour market numbers for 2008 (the country added 260,000 jobs) now the retail sales data is out

It’s bad folks.  Brace yourselves.  Get ready for the Globe & Mail’s best wordsmiths to pound away on this.

A 0.4% decline in retail sales from November 2007 to November 2008.  Is it too soon to say depression?

Even worse, if you exclude cars, there was a 0.8% increase in retail sales over the year.  That’s not a typo.  Increase.

In the midst of the “worst economic situation since the Great Depression” as we are told.

Strong employment growth.  Moderate retail sales.  Zero inflation.  Low interest rates.

And this is the worst since the Great Depression.  Hmmmm.

In fairness, because that caveat is almost always an appropriate way to CYA, most ‘experts’ are pointing to the real downturn to come in 2009 in Canada.

But we aren’t seeing it yet and the media would be wise to use tempered language around these issues as they have already contributed to the lowest levels of consumer confidence in decades even though as the data clearly shows there is currently no reason to be so pessimistic.

6 thoughts on “The Great Depression 2 is upon us!

  1. I say this is mostly in the central provinces.Going down

    Canada Falling Behind in Productivity
    TORONTO, Jan. 22 /CNW Telbec/ – Canadian companies are falling behind
    their counterparts in other industrialized nations in terms of productivity
    gains, and businesses in this country will have to improve their workplace
    operations in a number of critical areas if they are to remain competitive,
    says a major new international study.
    Proudfoot Consulting today released its Canadian Productivity Report, a
    companion study to its Global Productivity Report. The data compares workplace
    efficiency in Canada to 11 other countries – U.K, France, Germany, Spain,
    Russia, South Africa, U.S., Brazil, India, China and Australia. Proudfoot is
    the world’s leading operations management consulting firm.

  2. The G&M actually used the word ‘carnage’ to describe the decline in retail sales.

    I got curious about this so I downloaded the monthly retail sales data for Canada going back to January 1991. Since that time, month over month retail sales declined 70 months out of the 213 or about 38% of the time monthly retail sales declined. Since the end of the last recession, monthly retail sales declined 64 months by upwards of 4.5%.

    The reality is that monthly declines in retail sales are not uncommon – even during good times.


    I wonder if newspaper sales go up during a recession? Why else is the media bound and determined to make this as worse as possible?

    What do you t

  3. As far as newspapers go, it may be related to an imploding industry as newspaper sales drop, people go online and, as people do go online, they have much more control over what news they receive.

    It may also be that reporters lack an understanding of the meaning of all these reports. As someone who is not a journalist and not an economist, and really just sees business from the outside, I find it baffling that you can read on one day that we’re going to hell in a handbasket and the next that all things are okay. It seems (I stress seems) that figures, reports etc. can be and are cherry-picked to support whatever someone wants to day.

    I do, however, find the credibility of traditional media sinking, sinking. (Not that I find non-traditional any better.)

  4. What do you expect when the government is freely handing out tax money for bailouts? The more horror that is fabricated, the better prospect for a bailout. No matter that overpaid executives were incompetent, got their products wrong and their costs too high. Just use taxpayer’s money to offset their errors.

    New Brunswick was ahead of the curve in this game. We bailed out one branch of the Caisse Populaire with $60 million. Has anyone heard of anyone being fired or arrested at that branch?

  5. It IS very interesting, and as we’ve discussed, it mostly stems from the fact that Ontario is now a ‘have not’ province. That’s big. That shouldn’t be underestimated. And the job losses in ontario have been substancial. It was interesting to note that the ‘good jobs coalition’ had a protest at queen’s park which was under reported. While the Premier’s and PM hurrayed about how ‘labour mobility’ would be ‘enshrined’ between provinces, the GJC had a protest whose chief complaint was that EI premiums can’t be transferred across borders-that apparantly doesn’t have anything to do with labour mobility when it means a FEDERAL program.

    November’s retail drop was the largest month to month drop in a decade, which was what was reported at the CBC and it seems accurate. Everybody in retailing knows that without the christmas season, retailing would be dead in Canada. I remember working at K Mart and being told that 70% of the years revenues come from that season-and thats a department store.

  6. Wow. Outstanding retail performance. Consider the pre Christmas discounts that were reported. 50 and 60% off before Christmas and the drop was still less than half a percentage point. That should be a positive story.

    Will the G&M and the CBC successfully spur a bail out package for Sears and Walmart? I doubt it but it looks like they are trying.

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