Canada's Economy Sees Early Signs of Rebound in Q2

The Canadian economy has shown early signs of a rebound in the second quarter, according to new data from Statistics Canada. The real GDP rose 0.3 per cent in May, exceeding StatCan's initial estimate of 0.1 per cent growth.

Economists point to growth in both the goods and services sectors as well as a resurgent housing market as key drivers of this increase. Andrew Grantham, senior economist at CIBC, noted that these sectors were bouncing back from temporary drags in the first quarter.

The advance estimates now point to a 3.4 per cent annualized gain in the second quarter, which would mark a sharp rebound from the mild contraction seen in the first quarter. Grantham expects growth will cool back below two per cent in the third quarter amid new U.S. tariff headwinds.

TD Bank economist Marc Ercolao said that most recent data hasn't shown much evidence of a meaningful downturn, and BMO chief economist Doug Porter noted that the small dip in the first three months of the year 'overstated the economy's weakness'.