Winnipeg Free Press

Winnipeg Free Press (Newspaper) - October 8, 2008, Winnipeg, Manitoba C m y k Page a3 top news Winnipeg free press wednesday october 8, 2008 Winnipeg repress. Com a 3 t Oronto economists say Canada is headed for one of the toughest economic periods in recent memory As Job losses climb and Energy prices Tumble but its hard to Tell just How bad it might get Over the next year and a half. Making it hard to predict says to Bank tax to chief economist Don Drummond is that the current economic crisis a snot followed historical trends so far. The starting Point does not have any comparisons thatus the difficulty he said tuesday. You try to find a similar period in history and look at the conditions that will match that. But what do you do when youve never been Here in history Drummond says to Days trouble is unlike the great depression the japanese banking problems of the 1990s or any other major periods of Stock Market turmoil. Other economists pointed out that by definition we Arentt necessarily in a recession which is technically described As two or More consecutive quarters of economic contraction. Once a recession starts it generally lasts 18 months to two years. A recession does not necessarily mean that old traditional definition said Doug Porter chief economist at the Bank of Montreal tax boo. Officially we dont have two Back to Back quarters of negative Gap in our forecasts but that does not completely exempt Canada from being in a recession. The most recent recession to rip through Canada happened in the Early 1990s, an Echo of the Wall Street Stock Market crash of 1987 and More directly caused by the pop of the real estate Bubble. Canadas jobless rate soared to 10 per cent in 1991 and 1992, the Economy shrank and Consumers tightened their spending at the same time As the retail sector adjusted to a new consumption tax the get. In the recession of the Early 1980s the worst in the Post second world War Era the jobless rate peaked at 13 per cent. The great depression of the 1930s lasted about eight years and was accompanied by unemployment of More than 20 per cent. The latest Job numbers for september will be released Friday by statistics Canada and they re still expected to show growth in the Economy. Economists Are estimating an average of about 12,500 new jobs in september which is still considered modest Job growth but is Down slightly from the 15,200 jobs created in August. Canadas jobless rate is currently 6.1 per cent close to its lowest level in 30 years though economists expect it to Rise to 6.2 per cent for september. The downturn in the United states could quickly obliterate Canadas gains As u. S. Employers slash payrolls at an alarming rate. Canadian Auto workers economist Jim Stanford is betting that Darker times lie ahead predicting that Canada will be in a full blown recession by the end of this year. He bases his pessimistic Outlook on plummeting Oil prices which have descended from a record High above us 150 a barrel to about us 90 on tuesday. Our Economy has been very reliant Over the last five years on the commodities Bubble he said. If anything the downturn in Canada could be worse because on top of the financial uncertainty we had invested so Many eggs in the resource Basket. Now that the commodity Bubble has popped were going to feel that pain on top of the general financial uncertainty that everyone is grappling with. While Energy prices Are off from their recent highs a barrel of crude Oil is still about us 10 More than it was a year ago a sign that the Price declines a vent fully eroded growth. Furthermore the manufacturing sector in Central Canada is going to Wallow in its existing problems for several years and will Likely see More Job cuts up to another 100,000 within the next year Stanford predicted. The Canadian press Vancouver Canadian retailers Are slashing prices and making special offers to stimulate shoppers feeling less flush thanks to spiralling Stock markets falling House prices and higher borrowing costs. The pressure increased this week As the Stock Market wiped away years of gains and at least one Bank hiked some of its consumer lending rates by one percentage Point or about $ 150 a month on a Home loan of about $ 300,000. Fears Are also being fuelled by predictions from Canadian economists that the economic gloom could deepen into something worse than a recession pushing up the unemployment rate and eroding consumer Confidence. As a result of All of this i expect the consumer to slow Down his love affair with the shopping mall said Adrian Mastracci portfolio manager at Kim wealth management in Vancouver. Its Normal at this Point in the business Cycle to have people cutting Back but at the same time people who have a few dollars to spend can get some Good deals. Retailers Are hurting. They want to sell something. They wont give it away but will definitely shave prices. The deals now being offered Are normally saved for the crucial Christmas Holiday shopping season when people tend to spend the most Money. For instance roots Canada is now offering a $ 30 discount for every $ 100 spent at its stores across the country while Sears Canada tax Sec has rolled out budget Relief Price drops on hundreds of items ranging from clothing to appliances. Wal Mart Canada started cutting prices last week on everything from toys to electronics. Dan Putler chairman of the marketing division at the University of British columbian a Sauder school of business said Many of the discounts we now see in stores Are aimed at getting rid of fall inventory which was ordered earlier this year when the economic picture was Rosier. Retailers Are also trying to raise revenues at a time when Loans to buy future Stock Are More restrictive. Putler said a regular 60 Day payment Cycle has been reduced in some cases to 30 Days As wholesalers move to protect their own finances and demand quicker payment of their accounts. All of this combined just Means that people Are going to carry less inventory do less hiring and do a number of things along those lines Putler said. Peter Woolford vice president of policy and research at the retail Council of Canada said retailers will do whatever is required to attract the customer persuade them to buy the merchandise and give them value for their hard earned Money. That is always the Case but never More so than when Consumers Are nervous and concerned said Woolford. The Canadian press retailers seek to get Consumers to open wallets by Brenda Bouw Washington the Economy was front and Centre again on tuesday in the second u. S. Presidential debate Between Barack Obama and a struggling John Mccain a hons steadily sliding in the polls amid the financial crisis plaguing the United states. Everyone knows now we Are in the worst financial crisis since the great depression Obama said in response to the first question from an audience member at Belmont University in Nashville. I believe this is a final verdict on the failed economic policies of the last eight years strongly promoted by president George a Bush and supported by John Mccain. Mccain was clearly the Man on the hot seat tuesday night during the town Hall style event his Favourite Type of campaigning that featured questions from the audience instead of a forum that allowed the men to go head to head. Six million questions on Domestic and foreign policy were also submitted via e mail from the american Public. Right from the outset the Arizona senator seemed friendlier toward his rival than he was in the first debate two weeks ago in Mississippi smiling and making Eye Contact with Obama when they Shook hands to kick off the showdown. Thatus in contrast to Mccaints Demeanour in the first debate when he was criticized for barely looking at Obama. Americans Are angry they re upset and they re a Little fearful and its our Job to fix this problem Mccain said. The solution Mccain said was to end u. S. Dependence on foreign Oil keep taxes Low and Stop the spending spree thatus going on in Washington. Tax policy in fact was the trigger for much of the fireworks during the debate. Mccain told the crowd that nailing Down senator of amass tax proposals is like nailing jell o to the Wall. My friends he wants to raise taxes Mccain continued As Obama who is proposing a tax Cut for the Middle class sat listening with a look of dismay. I am not in favour of tax cuts for the wealthy i am in favour of leaving the tax writs alone Mccain said. Lets create jobs and lets get our Economy going again and lets not raise taxes on anyone. Obama frequently brought Back discussion to the Middle class saying it would be his duty As president to ensure the Public knew the Burden of the economic crisis was being shared by All americans including the wealthy. Its Tough to ask a teacher a hons making $ 30,000 or $ 35,000 a year to tighten her Belt when people who Are making much More than her Are living pretty High on the hog he said. I think As president we set a tone that All of us Are going to contribute. The event moderated by journalist Tom Brokaw came just As the race for the White House was getting increasingly Nasty after the Mccain Campaign stated publicly they intended to renew their attacks on of amass character. Some observers say the Mccain strategy is in danger of backfiring especially in Light of a Washington Post report on tuesday that someone in the crowd at one of palings speeches shouted out kill him when she criticized Obama. The associated press Mccain on of amass experience senator Obama was wrong about Iraq and the surge. In his Short career he does not understand our National Security challenges. We dont have time for on the Job training. Obama on Mccaints record its True. There Are some things i dont understand. I dont understand How we ended up invading a country Iraq that had nothing to do with 9/ 11. Mccain on of amass tax plan nailing Down senator of amass tax proposals is like nailing jell o to the Wall. Of amass tax philosophy As president we set a tone that All of us Are going to contribute. Economic grief defies prediction unprecedented origin makes forecasts hard by David Friend what is a recession a contraction of the Economy. Technically it is defined As two or More successive quarters of economic shrinkage. Length usually from 18 to 24 months. Signs of recession a drop in Gap real income employment Industrial output and wholesale and retail sales. Impact with joblessness up More social spending needed for welfare employment insurance and other programs. Government comes under pressure to implement direct Job creating spending. Depression a sustained recession May become a depression and last several years. The great depression of the 1930s lasted from 1930 to about 1938, with unemployment close to 25 per cent. Recent recessions Early 1990s triggered by the Wall Street Stock Market collapse of 1987 and the end of a real estate Bubble. The Canadian Economy shrank one per cent and the jobless rate Rose Over 10 per cent for 1991 and 1992. Early 1980s huge increase in interest rates to fight the Oil Price Shock inflation led to a massive recession with unemployment of 13 per cent in late 1982 and a restructuring of steel Auto and other Industrial sectors. Financial crunch dominates debate Mccain in hot seat Obama stresses Middle class by Lee Anne Goodman j. Scott Applewhite / the associated press John Mccain right Speaks As democratic rival Barack Obama listens tuesday evening. Mccain has been falling in the polls. A 03_ oct 08 08. Ind a3 10/ 7/ 08 10 27 19 pm ;