Just for the record, Statistics Canada reported this morning that Canada's real GDP fell by 11.1 percent in Q2, its worst ever quarterly showing. That equates to an annualized decline of 38.7 percent, meaning that Canada actually performed worse than the US in the quarter. This reflects the fact that Canada moved much quicker to lock down its economy as the pandemic hit.
These numbers are almost entirely unhelpful, if not outright misleading. I have been saying for some time that in current circumstances, the monthly GDP data are much more useful than the quarterly figures, and today's release shows why that's the case. StatsCan also reported this morning that real GDP grew by 6.5 percent in June, following on from a 4.8 percent rise in May. Moreover, StatsCan estimates that GDP rose a further 3 percent in July. That would still leave GDP about 6 percent below its February level, but it underscores the fact that the COVID recession really lasted just two months -- March and April -- with the economy slowly digging itself out of the hole since then.
Fans of annualization may have noted that using the "rule of 72", the June number annualizes to a growth rate of more than 100 percent! That's not going to persist, but focusing on monthly rather than quarterly GDP data will remain appropriate until at least the end of this year.
No comments:
Post a Comment