Canada May GDP - Q2 looking stronger than BoC forecasted
May Canadian GDP with a 0.2% increase exceeded a 0.1% preliminary estimate and extends a 0.3% rise in April. June’s preliminary estimate is for a 0.1% rise, which would leave Q2 up 2.2% annualized, above a 1.5% Bank of Canada estimate made with July’s Monetary Policy Report.
The Bank of Canada has made it clear that excess supply in the economy means there is scope for the economy to growth without adding to inflationary pressure, so this data does not exclude further easing if inflation continues to lose momentum.
May detail shows goods up by 0.4% led by a 1.0% increase in manufacturing but services up a modest 0.1% restrained by dips in retail and wholesale. Accommodation and food services was an area of strength up by 0.9% after a 1.1% rise in April.
June data is expected to see gains in construction, real estate/rental/leasing and finance/insurance, offset in part by slippage in manufacturing and wholesale'
