CANADA DATA: Canada May GDP Drops for Third Time in Four Months Through May
Jun-27 12:30
- Statistics Canada flash estimate for May GDP -0.1% as momentum slowed following tariff-driven surge in Q1. The decline in May was driven by oil, mining, public administration and retail trade.
- Official reading for April -0.1% MOM, below consensus for +0.1% as tariffs hit. Factories -1.9%, the fastest decline since April 2021. Goods-producing industries -0.6%.
- Transportation equipment contributed most to the drop. Wholesale also -1.9% in April with autos posting the largest drop.
- There were gains in finance, public administration (due to the election), arts and entertainment (five Canadian National Hockey League teams made the playoffs).
- StatsCan revised March GDP up to +0.2% from +0.1%.
- BOC has said it can cut rates if economy weakens and inflation contained. BOC's weaker scenario noted Q2 GDP would contract. Governor Macklem has said that the rate path hinged on the outcome of a U.S.-Canada trade deal, expected before BOC's July 30 rate decision where majority of analysts expect a 25 bp rate cut amid technical recession.
- This report is the last GDP report before BOC's decision next month. The next GDP report will be published July 31.
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