Bank of Canada Governor Tiff Macklem is doubling down on his claim that Canada will avoid a recession, despite new figures showing the economy shrank in the spring and job losses mounting across key sectors.“We are not expecting a recession,” Macklem told reporters, predicting growth of about 1% in the latter half of the year. Blacklock's Reporter said he admitted second-quarter growth was negative but argued the slowdown will be offset by what he called “slow growth.”The Bank of Canada lowered its key interest rate by a quarter point to 2.5%, the third cut this year, with the next rate announcement set for October 29.Macklem acknowledged the economy has weakened since July, pointing to job losses in auto, steel and aluminum while warning that tariffs from China and the U.S. are weighing heavily on exports ranging from canola to softwood lumber..“You’ve seen quite a bit of job losses in those sectors,” he said. “Employment growth in the rest of the economy has now slowed.”National output dropped 1.6% in the second quarter while unemployment climbed to 7.1%. Inflation, Macklem said, has been relatively steady, though pressures on core inflation appear to have eased.A Bank of Canada survey of market participants released August 11 found 35% of analysts believe a recession is probable within six months. Respondents flagged rising trade tensions and weak consumer spending as the main risks.Macklem has repeatedly insisted Canada will avoid recession, most recently at a July 30 rate announcement when he said the economy would still see modest growth in the third and fourth quarters.
