That was then....

In more normal times, Statistics Canada's monthly GDP data are a useful way of keeping tabs on the economy while waiting for the more comprehensive quarterly data to appear.  However, at this stage of the COVID era, with restrictions changing almost week by week, the monthly numbers are effectively out of date or even irrelevant by the time they are published.

GDP data for May, released by StatsCan this morning, are a perfect example of this. With restrictions in place across the country for most of the month, it is no surprise to learn that GDP fell by 0.3 percent, with 12 of the 20 industrial sectors posting declines. Coming on top of a 0.5 percent decline for April (revised from an initially reported 0.3 percent decline), the May data mean that real GDP for the month was about 2 percent below the pre-pandemic peak set in February 2020.  

However, many Provinces started to ease their pandemic restrictions in June as the third wave of the pandemic showed signs of slowing.  As a direct result, GDP promptly bounced back, with StatsCan's preliminary estimate suggesting a 0.7 percent gain for the month, thereby recouping most of the decline seen in April and May. Based on that preliminary monthly figure, StatsCan now estimates that real GDP for the second quarter of the year eked out a 0.6 percent gain, a slightly better outcome than seemed likely a month or two ago.  Actual data for both June and Q2 as a whole will be reported on August 31. 

As things stand at the end of July, the third quarter is looking very strong. COVID restrictions have eased across the country and despite real concerns over the delta variant, the success of Canada's vaccine rollout means that there is little likelihood of their being re-imposed any time soon.  It seems very likely that real GDP will be back to its pre-pandemic peak by September. Does this seem like an auspicious time for Justin Trudeau to call the Federal election he is lusting for? You might think that...