Canada – Real GDP fell 0.6% in May, a bit worse than the -0.5% print expected by consensus. Goods producing industries saw a 2.8% drop in output, with declines in all sub-categories including oil & gas (-9% is the worst monthly drop on records and came courtesy of the Fort McMurray wildfires). Industrial production fell 3.7% as a result, also the worst monthly slump ever. The services sector’s output rose 0.3% as gains in wholesaling, retailing, arts/recreation, finance/insurance, information/culture and health, more than offset declines in other sub-categories. Thanks to the decline in May and the poor handoff from the prior quarter, GDP growth for Q2 is now set to be negative, between -1% and -1.5% depending on the expected June rebound. But that’s a temporary hit because a sharp rebound is expected in Q3 as oil production recovers, reconstruction efforts in Fort McMurray get underway and consumers spend the extra income from the federal government’s enhanced Canada Child Benefits program.
The Survey of Employment, Payrolls and Hours (SEPH), a survey of establishments (unlike the Labour Force Survey which surveys households), showed that Canada lost 29K jobs in May. The SEPH showed a net loss of more than 8K jobs from January to May this year, contrasting sharply with the almost 120K jobs created according to the LFS’s paid component over the same five-month period. The SEPH also showed weekly earnings rising 0.2% in May, taking the year-on-year wage growth up to 0.9%.
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