Canadian economy shrinks

Canada's economy contracted in the second quarter. Bloomberg reports:

Canada’s economy shrank in the second quarter for the first time since the recession two years ago, as a high dollar boosted imports and curbed exports while natural disasters interrupted energy and automobile production.

Gross domestic product fell at a 0.4 percent annualized pace during the April-June period following a 3.6 percent gain in the first three months of the year, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg forecast no growth in the quarter, based on the median of 23 responses, with nine calling for an expansion and six for a contraction.

Elsewhere, the economic reports on Wednesday were somewhat more positive.

US economic data on Wednesday were quite positive. The Institute for Supply Management-Chicago reported that its business barometer fell to 56.5 in August from 58.8 in July, remaining well above 50. Factory orders jumped 2.4 percent after falling 0.4 percent in June. ADP reported that private employers added 91,000 new jobs this month following a gain of 109,000 in July.

Meanwhile, Japan's recovery from the earthquake and tsunami in March continues, albeit at a slower pace. Industrial production in Japan rose 0.6 percent in July following a 3.8 percent gain in June. The Nomura/JMMA Manufacturing Purchasing Managers' Index for August was 51.9, down from 52.1 in July.

In the euro area, inflation remained unchanged in August at 2.5 percent while unemployment was unchanged at 10.0 percent in July.