In
the U.S., specially-legislated tax rebate cheques will be mailed
out to individuals in May as part of a $160 billion stimulus
package. Lower interest rates are also helping, as the U.S.
Federal Reserve is taking drastic action and the Bank of Canada
is following the fed’s lead on a downward path.
However,
acting to restrain income growth is the slowdown underway in new
job creation. This is already quite noticeable in the U.S. In
Canada, it will result as a side-effect of the U.S.
slowdown/recession and the fact that the pool of available
workers has been greatly reduced, given that the unemployment
rate is at a 30-year low.
Reduced
residential real estate activity — far more pronounced in the
U.S. than in Canada — will cut into consumer spending as well.
A large share of dollar-spending in the marketplace is on items
for the home, from furniture and appliances to a host of
renovation products.
Finally,
wholesale trade figures are usually published a week or two
ahead of retail sales. The wholesale numbers are often an
advance indicator of what to expect from retail sales, a month
or so down the road. This is not encouraging for Canada, since
wholesale sales plummeted in the latest month. They were -2.9%
month to month in the latest period.
So
