CIBC Research discusses its reaction to today's Canada Q3 GDP print.
"A summer lull in Covid worries brought Canadians out to party, and their spending spree was fun while it lasted, but we're facing new concerns about whether a more vaccine-resistant variant could set back the timetable for further growth. The third quarter's real GDP growth of 5.4% annualized was more than a 2%-point pleasant surprise relative to our forecast and the consensus, which had been head faked by monthly GDP figures that pointed to something much weaker," CIBC notes.
"But that was essentially offset by a downward revision to Q2, which now shows a 3.2% annualized decline, leaving the level of GDP at the end of Q3 essentially in line with our projection, but somewhat below the Bank of Canada's expectations. Note that real GDP is still down 1.4% from where it stood in Q4 2019, the last pre-pandemic quarter, and a contrast to US GDP that is now well ahead of where it stood in that quarter," CIBC adds.