The rebound in third-quarter real GDP has prompted some commentators to conclude that Canada’s recession is officially over. But the real GDI measure, which incorporates important terms of trade effects on real income earned from production, reveals a different story entirely. The recent contractions in real GDI, stagnation in final domestic demand and high business inventories are all early symptoms of recession. The recent weakness in employment and the rebound in the unemployment rate are also pretty clear signals.
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