Monday, August 18, 2008

Canada's Economic Slow Down

Slow Economy Take Toll...
The slowing economy is taking its toll on household finances, driving up debt at a faster pace than incomes and assets, new analysis from CIBC World Markets shows. “This is a fact because the economy is underperforming,” CIBC economist Benjamin Tal said in an interview about his analysis of household credit. In the first quarter of 2008, household debt in Canada rose almost 3 per cent but personal disposable income rose just 2 per cent, pushing the debt-to-income ratio up to 130 per cent from 122 per cent a year earlier. At the same time, the level of assets hardly changed during the first quarter of 2008, since the stock market was correcting and house prices were levelling off. So the debt-to-asset ratio rose to almost 18 per cent, a full percentage point higher than in early 2007 and the highest level since early 2003, the report shows.

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