The United State’s biggest export market is also one of its closest neighbors: Canada. While the friendly, northern nation is still a big market for U.S. exports, a technical recession in the first half of 2015 is bad news for growth in the “world’s biggest economy.” Specifically, a report on September 1st shows that Canada’s gross domestic product contracted for a second quarter. Canada’s economy shrank by roughly 1 percent—worse than the 0.6 percent drop in the first-quarter.
Bricklin Dwyer, an economist at BNP Paribas in New York wrote that, “When Canada hurts, U.S. exporters do too.” While investors and economy-watchers have been alarmed all summer by a Chinese slowdown, the reality is that the direct effects on U.S. trade from a slowing Chinese economy are more contained than the potential fallout from faltering Canadian markets.
Canada counts for, “19 percent of total U.S. exports, followed by Mexico at 16 percent, each more than double China’s 7 percent share. And the Canadian dollar is sliding much faster: It has fallen about 12 percent against the U.S. dollar since the start of the year, while China’s yuan has dropped just about 3 percent.” Nobody should ignore China’s economic outlook though. Federal Reserve Vice Chairman Stanley Fischer noted that, “there are a lot of countries influenced by trade with China. The question is whether interactions with those countries would amount, jointly, to something that would have an impact on us.”
While markets around the world continue to react, and economy-watchers continue to speculate, there are steps you can take at home to protect your wealth and investments. If the news has you worried or stressed, talking to a financial advisor can help your shore up your financial resources and put you at ease. Call an expert at Apex Financial Advisors today to talk about your wealth, worries, and goals.