The Covid-19 pandemic caused the global recession that we're currently in. Recessions are a great time to pick up real estate investments at a low price, but you need to be able to afford them throughout the recession to make money. In other words, timing is everything.
Here are the signs to look out for that a recession may be ending.
One of the more common ways to measure economic recession is two consecutive quarters of a declining Gross Domestic Product (GDP). While this isn't the only measure of a recession starting, it's a big part of deciding if we're in a recession.
Inflation is another key indicator of a recession starting and ending. Inflation and stagnating wages halt consumer spending, which is ultimately what an economy depends on. Lower inflation, like we saw after the Covid re-openings, keeps consumers spending and the economy running.
Consumer spending stimulates all levels of our economy, including manufacturing, shipping, and services. Consumer spending also contributes to the GDP, which is another reason its essential to a well-rounded economy. Car sales were largely thought to be indicative of the end of the 2008 recession, and it could be similar now.
While unemployment is an integral part of the labour market's contribution to a recession, the number of jobs available is also essential. Canada had an unemployment rate of 5.1% and added 10,000 jobs in December. This is a slight improvement, but it still leaves options open for the Bank of Canada to stimulate the economy.
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