*Note: Data compiled from RAND California unless otherwise indicated.

The US Department of Commerce released  Quarter 1 2012 GDP data and the American economy saw an expansion of 2.2%. Expectations pegged growth closer to 3% so 2.2% was in fact under estimates indicating a plausible economic slowdown coming into the Spring. Of course, 2.2% is better than negative.

The Canadian economy had some tepid news pouring cold water on Bank of Canada rhetoric on possible interest rate in increases in the upcoming quarter.

GDP for the month of February 2012 in Canada was in fact down .2%. Financial and wholesale industries saw a modest increase, whereas energy and manufacturing sectors all saw declines. When oil and mining extraction falls, the largely commodity based Canadian economy will suffer.

The decline doesn’t appear to be having much of an immediate impact on the markets. The Canadian dollar still sits above par versus the Greenback. The mid-term concern for Canadian markets is the availability of credit, or put simply, the prospects of an overheated housing market.

Despite concerns from many major publications the Canadian housing market does not appear to be heading for a similar subprime housing bubble burst that the US saw at the end of 2008. There is certainly, however, a strong push for a market correction of about 10-20% nationwide. The higher correction points are likely to be seen in the major condo markets of Toronto, Vancouver, and even Calgary.

In the US, the housing market continues to stay relatively stagnant. There are few housing starts, and the number of foreclosures still remains quite high. Bankruptcy claims in the major cities of California, for example, continue to decline slowly. However, even modest declines of 2-3% per quarte period still amount to a high amount of consumers facing financial problems within a pay check or two.

Below is a graph where Q4 2011 statistics for Chapter 7 bankruptcy filings in San Diego have been included in a five year table. The good news, results quarter over quarter are declining. Having said that, the overall quarterly number is still comparatively higher than previous years–many are still feeling the pressure of financial contraints and some are facing the prospect of declaring personal bankruptcy.