America’s neighbor to the north appears to have entered a recession.
Canadian economic output shrunk 0.1 percent in the second quarter, the Canadian government reported Tuesday.
The nation’s economy has now contracted for two quarters in a row, following a revised 0.2 percent decline in inflation-adjusted gross domestic product in the first quarter. Most economists define a recession as two or more quarters of shrinking output.
Canada is the United States’ most important trading partner. Its growth slowdown comes as the U.S. economy has recovered from the recession to the point that the Federal Reserve is considering raising interest rates for the first time since the crisis. The Bank of Canada, facing inflation at the low end of its 1 percent to 3 percent target range, cut rates to 0.5 percent at its most recent meeting.
Canada last was in recession in 2008 and 2009, during the global financial crisis.
The two-quarter decline in gross domestic product may not represent a persistent, broad downturn. Experts have suggested that the contraction may remain isolated to energy-related sectors, which have been hit hard as oil prices have cratered over the past year.
Output in the mining, quarrying and oil and gas extraction sector fell by 4.5 percent in the quarter, the second straight decline.
The Bank of Canada, Canada’s central bank, projected in July that growth would pick up over the second half of the year and ultimately come in at 1 percent for 2015.
There was at least one sign in Tuesday’s report from Statistics Canada that growth was poised to resume: Real GDP grew 0.5 percent on a monthly basis in June, the last month of the quarter. The report is also subject to future revision.
