As Canada and Alberta make their way through this pandemic, moving into new stages of whatever the future normalcy looks like, we are seeing positive trends in the Canadian economy, and maybe for some areas, some of the worst is behind us.
That being said, if you have your 2020 bingo card handy, the chances of a massive super volcano or a meteor hitting the Earth seem awfully possible after the insanity of the last six months, and the current unrest south of the border.
But, the two positive signs is that the Bank of Canada, our nation’s central bank kept the benchmark interest rate at 0.25 per cent, which is an ‘effective’ bottom rate, and we have avoided the worst case scenario in not only lost lives to the virus, but also economically.
That being said, there’s still a large portion of our population that are unemployed, with numbers coming out that 8.4 million Canadians applying for the Canada Emergency Response Benefit. Unemployment is at one of its highest rates ever for May, with 13.7% of the country unemployed. Any recovery is going to be slow and steady, as we enter new phases of reopening, and hopefully the virus numbers stay in check as more businesses get back to work, and employees are able to increase hours and stabilize their incomes. A new report from Indeed.com indicates that job postings are up over last month, trending upwards, even if well below last year’s levels.
In Alberta we definitely have increased pressure on the economy with low oil prices, even before COVID-19, and job losses and businesses closing shops. Alberta’s unemployment rate hit 15.5 per cent in May, up 2.2 per cent from April. What that recovery could look like seems to be an unknown at the moment, but we could see some shift away from some oilfield jobs to other sectors, temporarily, or perhaps more permanently.
Some positives nationwide is that home purchasing is starting to pick up, although we’re not really sure what that looks like locally, after March and April was considered some of the slowest months on record. But, with very low interest rates, if you were managed through the last few months well, and are in the market for a new home, this is a great time to buy. The housing market is more of a buyer’s market and low interest rates will really help consumers who are ready to buy.
The road to recovery will likely be a long one, but to move forward, we will need to make one step in front of another and repeat.