Fading Recession

Canada's spring recovery has surpassed the brightest forecasts of the experts. In the best pickup since recession's onset, unemployment declined from 516,000 in April to 366,000 in May, when only 6.1% of the working force was jobless (v. 7.2% in the U.S.).

The bounce-back stemmed from a combination of good luck and government help. Last year, when the economy was still riding high, hundreds of school boards and town councils voted to go ahead with building plans; work on schools, roads, city halls, sewers and hospitals got going in time to cushion the worst of the recession. The Tory federal government of Prime Minister John Diefenbaker also pitched in with spending so heavy that the new budget of $5.3 billion shows a deficit of $640 million.

No one was quite ready to declare the recession extinct or the threat of a setback ended. Automobile production sagged 19% off last year's rate; industrial building was off 31%. Canadians also kept an eye on the U.S., where an economic revival is certain to give an extra push to Canadian business.

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