GDP began to rise again in May

We think that GDP rose by a bit more in May than Statistics Canada indicated in its press release for the April GDP data, and a larger rise is likely in June.

3rd July 2020 · 5 mins read

Canada Data Response

International Trade (May)

The merchandise trade deficit unexpectedly narrowed to $0.7bn in May, from $4.3bn, as exports were boosted by the reopening of motor vehicle production plants and the rebound in crude oil prices.

2nd July 2020 · 2 mins read

GDP by Industry (Apr.)

GDP fell by a record 11.6% m/m in April, but the drop was better than the 15% we assumed and means we have upgraded our estimate of second-quarter GDP to a still-weak 40% annualised contraction.

30th June 2020 · 3 mins read

Downgrade means little in practice

The decision by Fitch to downgrade Canada’s sovereign debt rating means little in practice, and we think the long-term public debt outlook is far less concerning than for many other economies.

26th June 2020 · 6 mins read

A running start on the long road to recovery

Developments over the past month suggest activity is rebounding strongly as restrictions are lifted. The CFIB measure of small business confidence has now made up most of its post-virus slump, and the...

25th June 2020 · 10 mins read

Continued income support to help spending recover

The generosity of CERB, signs the government will continue payments for as long as needed, and the fact that household savings have already risen sharply all suggest the initial stages of the rebound...

23rd June 2020 · 4 mins read

Housing still the big unknown

We are growing more confident that the initial rebound in economic activity following the lockdown will be stronger than we first thought, but housing remains a key risk to the outlook beyond the next...

19th June 2020 · 4 mins read

Retail Sales (Apr.)

Retail sales fell by far more than expected in April and suggest that the plunge in GDP was in the region of 15% m/m. More encouragingly, Stats Can also said today that sales bounced back strongly in...

19th June 2020 · 3 mins read

Consumer Prices (May)

The further fall in inflation to -0.4% in May was unexpected but most likely marked the trough. As gasoline prices rebounded further in June and some items are likely to increase in price as...

17th June 2020 · 2 mins read

Huge CERB payouts point to stronger recovery

The Canada Emergency Response Benefit has paid out far more than we expected and household income was probably broadly unchanged in the second quarter. Together with the confirmation today that the...

16th June 2020 · 3 mins read

Manufacturing Sales (Apr.)

The 29% m/m slump in manufacturing sales in April was larger than expected and supports our below-consensus forecast that GDP contracted by 45% annualised in the second quarter.

15th June 2020 · 2 mins read

Employment gains to be far larger in June and July

The unexpected 290,000 rise in employment in May was driven by Quebec, where restrictions on activity were lifted early in the month. As the other three most populous provinces lifted restrictions...

9th June 2020 · 4 mins read

Rising employment a relief but risks remain

The rise in employment in May supports our view that GDP starting increasing again last month. There are still significant risks on the horizon, however, with the latest housing data painting a mixed...

5th June 2020 · 4 mins read

Labour Force Survey (May)

The 290,000 increase in employment bodes well for GDP in May, particularly with hours worked increasing at an even faster rate. Employment is likely to rise by even more in June as further...

5th June 2020 · 3 mins read

Bank likely to expand corporate bond purchases

We expect the Bank of Canada to announce additional corporate bond purchases next week. If it wanted to do even more, the Bank would probably introduce a funding for lending program rather than take...

27th May 2020 · 6 mins read