Canada’s economy continues to outperform, and received further revisions of prior data. Statistics Canada (Stat Can) data shows real gross domestic product (GDP) showed surprising growth in October, coming in 3x expectations as real estate returned as a driver. September data has also been revised to show double the growth originally reported, indicating the economy is much stronger than believed. However, this data is in direct conflict with most other economic indicators that reflect a more recession-like picture.
Canadian GDP Grew 3x Faster Than Expected In October
Canadian GDP accelerated much faster than expected in the latest data. Real GDP advanced 0.3% in October, triple what the agency expected in its preliminary data. The agency notes 12 of the 18 major sectors saw growth.
GDP is composed of Goods and Services, and both are growing once again. Goods (+0.9%) advanced for the first time following 4 months of declines, led by a recovery in the Mining, Quarrying, and Oil & Gas sector. Services (+0.1%) climbed for a fifth consecutive month, driven by the Real Estate, Rental & Leasing sector.
The agency isn’t as optimistic the accelerated growth will continue into the next report. Stat Can’s preliminary estimate shows a contraction in November (-0.1%), though these “flash estimates” have been so off the mark they’re basically useless at this point.
October’s surprise now has GDP growth for Q4 tracking closer to the Bank of Canada (BoC) estimate. When it delivered a supersized cut just a few weeks ago, the central bank had partially justified it with the belief it would be significantly below target. If November surprises with any growth, it may match or even exceed the forecast. In that case, the market would be considered a little overstimulated.
Canadian GDP Gets More Upward Revisions, Paints A Different Picture Than Other Data Points
Canada’s real GDP data appears to have gotten another revision. The agency updated the data to show real GDP grew 0.2% in September, more than double what was originally reported. In other words, the economy is doing much better than reported. Though the anecdotal evidence such as consumer spending and unemployment doesn’t seem to jive with that narrative.
Canada’s economy continues to show surprising growth, with upward revisions printing shocking numbers. On the surface, that’s good news—but the return of real estate as a driver while manufacturing continues to weaken indicates productivity is set to fall even further.
The growth is also unusual in the sense that it doesn’t go together with other recently reported data. Inflation cooling is a sign of weak, not robust consumer demand. The currency is also at one of the weakest levels in decades, indicating less than optimal trade. Then there’s the rising unemployment and weaker revenues forecast in the Government of Canada’s recently released Fall Economic Statement. However, those GDP numbers keep getting stronger—even long after they’re reported.
In a efficient market there would be no renters
Indeed, too many middle layers – governments included.
Smoke ,mirrors, fudge factory hard at work. Canadians know they have less, if any money. Payroll taxes have increased. 2 million visits to foodbanks per month. Job reports created are gov jobs= non productivity. Housing is 8% of Canada’s GDP, any bump would move the needle. Canada is not in a recession. We are in a depression. 62 out of 69 in comparison to other countries economic viability. Strongest fiscal position in the G7 is a blatant lie. Canada is LAST and they have no business counting our CPP as their money. Regime change is needed and until then, get ready for a world of hurt.
Absolutely misleading and creating a false rosy pictures. GDP didn’t grow 3x or whatever which you’re trying to show as if we beat all the records. 0.3% is nothing while the actual Nov growth is -0.1%. We are almost in recession but check your headline. Stop this nonsense.
It’s really not, you’re just a baby that can’t do math. It’s LITERALLY 3X expectations—that’s like adding an extra 2 months of output.
Seriously, get a life. Everything you don’t understand isn’t nonsense, you just need an education that’s more advanced than one you get at an airport hotel when you got your real estate license.
Using insults to reply to a well thought out opinion; the hallmark of a supporter of the failed NDP/Liberal regime. 3x of a fraction of a fraction does not equal a win. Thankfully the adults are on their way in to fix the mess the drama teacher and his students made.
You see name calling. An analyst sees someone that doesn’t understand this data is used for financial models and is the difference between 1.2% annual GDP growth and 3.6%.
The problem isn’t the person who gives the raw data, it’s the person who doesn’t understand what it means and dismisses the gap between per capita growth rising. They aren’t calling someone names, they’re accurately telling a person not to angry-write at someone that understands what they’re talking about.
People think the gov is gaming data to over perform, but it’s just as likely (if not more so) that they would fudge data to underperform so they could get cheaper debt.
Please stop identifying the ability to not understand basic finance as a Conservative trait. That’s actually my party. If Pierre made this kind of mistake I wouldn’t vote Conservative. I would just move.
I don’t buy it. What could be causing these Canadian GDP growth numbers to be so disconnected from our everyday reality as well as from the rest of the world?
September’s GDP grew by 0.2%, annualized that would we 2.4%. October’s GDP grew 0.3%, annualized that growth would be 3.6%. Really? Canada’s GDP growth is lacking other G7 countries, but well, it’s not lacking if you would believe these September-October numbers. What should be the GDP growth numbers in the other G7 countries that are ahead of Canada?
Canadian GDP growth numbers further lose credibility when Canada’s economic engine (Toronto) has 9-10% unemployment rate with the productivity of the nationally employed work force hovering on a level of a third world country.
Could somebody please break it down for me, inform me how can this be happening.
Another topic related to “real numbers”, as nowadays nobody in the world is buying Canadian Bonds since recently, prompting a creative solution by the Canadian government that started buying its own bonds from itself. Could it be that the money Canadian government is using to buy their own bonds (money that in really is just a number on a paper and didn’t exist let’s say a month earlier or is borrowed to be repaid with interest), could it be that “the newly created artificial money” is counted as a legitimate investment capital, as a genuine incoming investment money, that in return fudges all the numbers? Could this be happening, that the money is counted using only one eye so that the other eye doesn’t see where it is coming from as well as not to see a current fiscal hole it creates, that’s accompanied with currency devaluation or further compound interest payments, if it’s a real borrowed money rather than a number on a paper.
I’m of a technical background, please tackle these, where am I wrong?