Coronavirus Carnage

Daniel Tencer:

Canada’s economy will clock its steepest decline on record in the coming months, and unemployment is set to rise to its highest level in nearly a quarter century, a new CIBC forecast says. [...]

The forecast predicts Canada’s economic output will shrink at a 15-to-20-per-cent annual pace in the second quarter, the fastest contraction in records going back to 1962.

Millions will feel serious pain because of the culture of debt. 180%. That's the average Canadian household debt relative to disposable income. Now, in just one week, half a million Canadians have lost their jobs. Worse, this will have a compounding effect: most will severely curtail their spending for months, if not years. Many industries -- airlines, hotels, restaurants, tourist attractions, theaters, etc. -- won't be hiring new workers for a long time. Those who are graduating from universities with mountains of debt will have to suffer through rotten times.

Other countries will also take a serious hit.

Economists at investment bank Goldman Sachs see the U.S. economy shrinking at an incredible 24-per-cent pace in the second quarter.

The last time the global economies crashed in such a sharp manner was 90 years ago. This terrible virus is a painful reminder to avoid debt and always have emergency savings. People wrongly think that their incomes will be stable. Business failure, recession, war, natural disaster or a pandemic can completely devastate multiple professions.

"Ah, those things are rare!"

Yeah, something rare always happens!