Canada – Real GDP at basic prices fell 0.5% in May for a tenth straight monthly decline. The goods-producing sector remained a drag on growth, shrinking 1.6%, its worst performance since January 2009. Servicesproducing industries remained unchanged for a second consecutive month. With two months of data reported for the quarter, real GDP is down approximately 3.0% at an annualized rate. However, we expect both domestic and foreign demand to perk up in the second half of the year. Hence, Q2 should mark the end of the current recession in Canada.
United States – There was encouraging news on the housing front this week. New-home sales advanced more than expected in June, rising 11% to 384,000 units (seasonally adjusted annual rate) for a third consecutive monthly increase. However, activity is still down significantly from a year ago (-21.3%). Good tidings came also from the Standard and Poor’s Case-Shiller Index, which showed that home prices edged down 0.2% in May, the smallest decline since February 2007. On a nonseasonally adjusted basis, the index was actually up 0.5% on the month. Both these reports suggest the U.S. housing market is poised to stabilize in the second half of the year.
