Canadian Tory Recession Call: Beware the Revisions!

From today’s Daily Commercial News,

Who is Michael Chong?

So, what’s the picture of reported (quarterly) GDP, and two nowcasts:

Figure 1: Canadian GDP (blue), ScotiaBank nowcast of 6/29 (light blue square), Canadian Chamber of Commerce Business Data Lab of 6/29 (green triangle), Bloomberg consensus (red square), all in mn.Ch.2017C$ SAAR. Source: StatCan, BDL, ScotiaBank, author’s calculations.

The q/q SAAR growth rate in Q1 was -0.1%. The mean absolute revision to growth over the 2020-22 period is 0.15 ppts. Hence, it’s not unlikely that the revised growth rate could be positive (or more negative), although on average revisions have been upward over this same period (by 0.20 ppts). In other words, don’t bet against a revision away of the “rule-of-thumb” recession.

A reminder that other indicators suggests — if not an upturn — no sustained downturn:

Figure 2: Canadian real GDP (blue bars), monthly GDP (black line), both in logs 2025M10=0. Source: StatCan, and author’s calculations.

The two series diverge as the quarterly series are based on expenditure side tabulations, while monthly relies on production side data. Latest employment indicators are rising.

Figure 3: Monthly GDP (green), employment (blue), nonfarm payroll employment (red), employment +15yr (blue), all in logs 2025M10=0. Source: StatCan and author’s calculations.