The risk that the economic slowdown in theUnited Stateswill turn into another North American recession is not high,Canada’s finance minister said Tuesday as he cautioned that too many people nevertheless remain jobless in this country.
“I do not think the risk is great,” Jim Flaherty said in response to a reporter’s question at the International Economic Forum of theAmericastaking place inMontreal. “There are risk indicators with respect to which we are concerned which we reviewed in the budget [Monday] and which I reviewed with the private sector economists with whom I met last week. The nature of the risks have not changed. We are concerned about debts and deficit in theUnited Statesand the need for a convincing longer term plan in theUnited States” to deal with those problems.
Ottawais also concerned about some evidence of continuing slowness in the U.S.real estate market which puts a damper on consumer confidence in that country, Mr. Flaherty said. As well, it is worried about the sovereign debt situation among some euro zone countries, including Greece.
“These are all risk factors but they are known risk factors,” Mr. Flaherty said, adding that to address the risk in the latest budget, federal finance officials discounted private sector growth assumptions by $10-billion in nominal GDP each year, equaling a revenue markdown of $1.5-billion annually.
TheU.S.economy grew at a 1.8% annual rate in the first quarter but job growth remains anemic, prompting U.S. Federal Reserve Chairman Ben Bernanke to say Tuesday that the central bank should maintain monetary stimulus to boost a “frustratingly slow” recovery.U.S.employers hired 54,000 more people in April, well below the 165,000 expected by economists.
“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Mr. Bernanke said in a speech inAtlanta.
Financial Post - Nicolas Van Preat
Jun 8, 2011 - 7:31:45 AM