CANADA - Economic figures in Canada continued to boom in June, creating 93,200 jobs with the largest gains in self-employment (25,600). This brought the unemployment rate in Canada down to 7.9%.
Most of the job gains were in Ontario and Quebec. The biggest increase was the service sector which added 103,400, but the manufacturing sector cut 10,200 jobs during June. The overall job gains was way more than the expected 18,000.
These new jobs were split pretty evenly between full time and part time, 48,900 and 44,200 respectively.
Combined with previous job gains since the start of 2010 Canada has now recovered 95% of all the jobs that were lost during the American Recession.
But Canada is still not out of danger's way. Economists are now warning the real estate market in major Canadian cities is about to burst their bubbles. Toronto home sales in June are down 23%, the second month of decreases. Meanwhile according to real estate economists Toronto homes are overpriced by approx. 30 to 50% and this bubble is expected to burst sometime in 2010 or early 2011.
When that happens it will hurt the construction industry and there will be a ripple effect hurting other sectors, including manufacturing and the banking/mortgage industry.
Canada's big banks never received a bailout during the 2007-2009 American Recession (which itself was caused by a collapsing real estate market). The same thing is expected to happen here in Canada, but sometime in the next 6 to 9 months. When it happens many mortgage deals will fall through, the banks will be stuck with properties that are worth 30 to 50% less than the amount that was paid for them and this in turn will effect the equities and deriviatives market on the Toronto Stock Exchange. When that happens we may yet see a bank bailout in Canada.
Meanwhile the Bank of Canada is thinking of raising interest rates in late July, which if they do will hurt home prices by making it more difficult to get a good mortgage rate and will have a downward effect on the already faltering real estate industry.
If and when the real estate bubble bursts in Canadian cities it will mean a stock market crash, many lost jobs and a deep Canadian recession that will make our woes during the American recession look minor in comparison.
See Also:
The Toronto Real Estate Market
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