Canada's economy: 5 reasons not to panic

A recent spate of frightening economic headlines paints a dire picture of the economy, butan examination of some basic gauges of Canadians' financial healthdemonstratesit'snot all doom and gloom.

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News of plummeting oil prices, thestruggling stock market and a loonie that recently dippedbelowthe 75-cent US level for the first time in more than adecade haveCanadians on edge andfearful for theirfutures,as economists debate whether this country isin a recession.

But already, things are looking up. The North American and global stock markets surged onThursday, oil rebounded toabove $42US a barreland the Canadian dollar recovered toabove the75-cent line.

While the effects of the economic downturn on Canadiansshould not be downplayed, there are plenty of reasons not to panichiring remainssteady, home values are up, gas prices are down, people are generally managing their debt responsibly and most Canadians havenice nest eggs of savings and investments.

1. Most people are working

The most recent job numbers from Statistics Canada showthat employment in Canada issteady and job growth is modest.

While many have been quick to label this year's economic performance a recession, the job numbers just haven't backed that up.-Douglas Porter, BMO chief economist

In July, the economy created 6,600 additional jobs, and theunemployment rate remained at 6.8 per cent for the sixth straight month.

"Make no mistake, this is not a strong report ... but it's also not notably weak," BMO chief economist Douglas Porter told CBC News at the time."While many have been quick to label this year's economic performance a recession, the job numbers just haven't backed that up."

As of July, Canada had added100,000 jobs in 2015, despite amajor downturn in the oil and gas sector.

2. Housing market defies odds

The value of Canadians'homes also continues to climb, despite a shrinking economy.Canada'sTeranet-NationalBank House Price Index was up 1.2 per cent in July.

In a Reuters poll released Wednesday,20 analystspredicted this trend would continue. Canadian home prices will likely rise 5.2per cent this year, they said, followed by twopercent in2016 and 2.3 per cent in 2017.

Mark Hopkins, senior economist at Moody's Analytics, called Canada's housing market "bullet-proof."

"It seems to not only be defying the odds in terms of surviving the large downturn in the global economy, but even now with gross domestic product contracting, it seems as though existing home prices have accelerated, which is a bit strange and counterintuitive," he told Reuters.

3. Gas prices are down

Gas pricesare down all over the country,providingfinancial relief for Canadians. People can take the money they save at the pumps and use it toinvest, spend or pay off debt.

Thursdayevening, the average cost of a litre of gas inCanada wasdown 2.7cents from the day before, 7.0cents from a week ago, 7.7cents from a month ago and 20.6cents fromlast year, according to GasBuddy.com.

• MAP: Gas prices across Canada

"There's a significant decrease over the past week across the board,which is not common. You usually see energyprices move here and there, but the drop has been dramatic," Dan McTeague, senior petroleum analyst for the site, said. "It does represent some relief for those who have been paying exorbitantly high prices for fuel."

While it's impossible to predict gas prices with certainly, McTeague expects they will remain low for the foreseeable future, barring anyextreme events.

"It looks like there's a fairly decent balance between supply and demand,so thatwillkeep a lid on prices or keep them moving down, but we will get hiccups," he said.

4. Debts getting paid

Canadians are deeper in debt than they've ever been, but they're managing it verywell, accordingto arecent report from credit monitoring agency TransUnion.

• Debt: How to use it and not abuse it

Excluding mortgages, theaverage debt for a Canadian consumerwas $21,028 in the second quarter of 2015, compared to $20,880 in the same period last year, the report found.

Butdebt payments overdue by 90 days are in decline by four per cent, andCanadians are paying down much more of their lines of credit and loans.

"Delinquency rates of all credit products are relatively low, but even so we have observed a pronounced improvement in some of the most popular credit products such as lines of credit," Jason Wang, TransUnion's director of research and industry analysis, said in a news release.

"This is a positive sign that Canadians are both increasingly aware of the importance of making payments on time, and have the capacity to do so."

5. Canadians savefor a rainy day

Canadians slowed theirpace of borrowing and increased their savings in 2014, putting many peoplein a good position to deal with thisyear's struggling economy,according to the 2015WealthScapes analysis, released Wednesdayby Environics Analytics.

Canadian balance sheets are in very good shape even better than prior to the financial crisis.-PeterMiron, senior research associate at Environics Analytics

Household net worth last year increased 6.1 per cent over the previous year, despite a 2.9 per cent growth in debt, the report found.Nationwide, liquid assets defined as the sum of savings and investments were up 5.5 percent in 2014.

"Many people have become fixated on the risks of debt," Peter Miron, senior research associate at Environics Analytics and lead developer of WealthScapes 2015, said in a press release."But Canadian balance sheets are in very good shape even better than prior to the financial crisis."