Bad news on two fronts shakes confidence

Canada’s economy is standing on shaky ground, according to two indicators.

First, manufacturing sales have slowed for the third time in four months, the Canadian Press reports. While sales had ticked up in March, they fell by 0.8 per cent the following month according to Statistics Canada.

From CP:

Analysts, who had expected a slight increase, said the soft number suggests the second quarter of 2012 got off to a rocky start after a below-expectations gain of 1.9% in first three months of the year. Forward looking indicators were not much better, with new orders falling 3.2% and unfilled orders flat.

“(This) does not bode well for overall economic growth,” said Dina Ignjatovic, an economist with TD Bank.

Second, Canadians seem to be ignoring warnings that current household debt levels are unsustainable. In the first quarter of 2012, the debt-to-income rate was calculated at 152 per cent, compared to 150 per cent in the previous quarter, the Financial Post says.

From the Post:

The debt to income ratio rose because the growth in household disposable income was outpaced by the growth of debt as investment income dropped and Canadians paid more personal income taxes.