Why don't the media employ people who know how to interpret economic data any more? A local news station in Toronto just introduced its report on Canada's August GDP data by describing the economy as "slowing". Neither the headline number nor the details of the report support that conclusion in any way.
According to Statistics Canada, real GDP grew 0.4 percent in August, compared to a decline of 0.1 percent in July. It's true that this was slightly below StatsCan's preliminary estimate, but real GDP has grown 4.1 percent in the past twelve months. Fifteen of the 20 industrial sectors tracked by StatsCan posted higher output in the month, led by what the agency terms "client-facing services" such as accommodation and food services, as pandemic restrictions continued to ease. The 7.0 percent month-to-month rise in accommodation and food services was the major driver behind the 0.6 percent gain posted by the entire services sector in the month.
At first glance, the 0.1 percent fall in goods output in August looks worrisome. However, it turns out this was fully accounted for by a second consecutive sharp decline (5.7 percent) in agricultural output, which is almost entirely the result of drought conditions in the western Provinces. Manufacturing, which has been bedeviled by supply chain issues for several months, recorded a 0.5 percent gain in the month.
StatsCan's preliminary estimate for GDP in September suggests almost no change from August, which leads it to project that real growth for Q3 as a whole was likely 0.5 percent. (Actual data will be released on November 30). That annualizes to a 2 percent rate, identical to the figure already reported for Q3 growth in the United States. With further removal of pandemic restrictions in Ontario and elsewhere, growth has very likely picked up again in October. Certainly the Bank of Canada sounded upbeat about the outlook earlier this week -- it's just a pity that nobody told CTV Toronto.
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