Canadian Economist Named Most Accurate

Sherry Cooper,an economist with BMO Financial Group,has been named the most accurate economist by Arizona State University's W.P. Carey School of Business.Dr.Cooper has also been recognized as one of Canada's most influential women.Educated by the University of Pittsburgh,she was selected as most accurate from a panel of 50 economists by Arizona State.
Dr.Cooper and her team were credited with pinpointing key indicators of both the beginning and end of the recent severe recession.
There's still a big unemployment overhang,Dr.Cooper observed.It wasn't caused by high interest rates as in previous recessions.Businesses laid off massively,so they're reluctant to hire back until the orders really start to come in.Employment contracted by 6%,which is totally unprecedented.
Until we start to see expansion in new businesses as well as old,it's hard to get everyone back to work.We could see unemployment at 9% by the end of 2011.The wave of inventory restocking is over,so the purchasing of equipment and machinery won't be as strong,either.
On the plus side,Dr.Cooper noted that consumption is growing a little bit more.The consumer is starting to come back.The effect of quantitative easing 2,the Federal Reserve's purchasing of more assets,will be pretty modest,but it is stimulative.
We're in a disappointingly slow recovery,but there won't be a double dip recession.
Bank of Montreal(BMO)

Why Canada Did Better

On the jobs front,Canada has clearly outperformed,says Andrew Pyle of full service financial firm Scotia McLeod.Canada's growth of over 2% is reflecting domestic demand.Commodities are a much bigger share of Canada's exports,but there's been a slight shift to domestic spending from commodities,which has been helpful in the past six months.He thinks Canada will get an interest rate hike before the end of the quarter.
The financial landscape in Canada was a lot firmer before the recession,Mr.Pyle indicates.Consumers there weren't hit by housing,so their wealth wasn't so impacted.Nonetheless,the direction of Canada's economy and the Canadian dollar,the Loonie, are tied to the U.S.,Canada's largest trading partner.If the U.S. takes a double dip,it won't be good for the Canadian economy,the financial planner noted.
Scotia McLeod is a division of Scotiabank.Founded in 1921,it serves clients through a number of branches,including the National Branch in Toronto.
Bank of Nova Scotia(BNS)

Double Dips Are Rare

The economic data do not reinforce the idea of a double dip recession,says Tony Crescenzi,Senior Strategist and Portfolio Manager at PIMCO.Yet sustainability is in question.Job creation doesn't match labor force growth today.Double dip recessions are rare,however;there have only been three in the past 150 years.
It really probably emanates from the sovereign debt crisis:if Europe stays stable,perhaps the escape velocity for growth will be reached.There is income growth at this time.The money market has improved and then moved sideways since May.Hopefully there will be clarity and transparency in Europe on the bank stress tests.In the meantime,consider Treasury securities as insurance for portfolios,Mr.Crescenzi suggests.
Apart from another recession,a slow growth environment is quite harmful in itself,hindering employment prospects and straining all levels of government.In that scenario,tax revenues may not recover fast enough to avert fiscal train wrecks.