Canada: Q2 GDP may have expanded about 3% - NBF

Next week, the key economic number in Canada will be GDP growth on Thursday. According to analysts at the National Bank of Canada,  GDP may have expanded about 3% annualized in the second quarter of 2018.

Key Quotes:

“Monthly readings to date suggest economic growth accelerated sharply in the second quarter, in large part due to trade which contributed to growth for the first time in a year thanks to surging exports. Domestic demand was also well supported courtesy of a rebound in consumption spending (if Q2 retail sales are any guide) and the continuing recovery of business investment (based on strong imports of machinery and equipment in Q2). All told, GDP may have expanded about 3% annualized in the second quarter of 2018. However, the handoff to the third quarter was probably soft with June GDP growth close to zero because gains in manufacturing were reportedly offset by declines in wholesale and retail among others.”

“Also on Thursday, June’s Survey of Employment, Payrolls and Hours (SEPH) will provide additional clues about the state of the labour market. On Wednesday, balance of payments data for the second quarter could show the current account deficit narrowing to around C$14.5 bn (about 2.5% of GDP) thanks to improvements on the merchandise trade balance.”