Canada Reports May GDP and First Look at a Rebounding Second Quarter

Statistics Canada released figures for real gross domestic product in May, together with a flash estimate for June, giving the first clear picture of how the economy fared in the second quarter. Early indications had pointed to a modest 0.1% rise in May output, a slowdown from a solid 0.5% advance in April, as the economy worked through the drag from trade tensions and elevated borrowing costs. The May and June readings are significant because they follow two consecutive quarterly declines in real GDP, including a mild contraction in the first quarter that surprised the Bank of Canada and many economists. The results will help determine whether growth resumed over the April-to-June period or whether the economy remained under strain. Canada's central bank has held its policy rate at 2.25% amid uncertainty tied to shifting global trade relationships, and policymakers are watching output, jobs and inflation closely as they weigh the path ahead. A return to growth would ease concerns about a deeper slowdown, while continued weakness could strengthen the case for more supportive policy in the months to come.