07:08 AM EDT, 07/31/2024 (MT Newswires) -- Canada will publish the May gross domestic product (GDP) report at 8:30 a.m. ET on Wednesday, noted Bank of Montreal (BMO).

The bank said that the Canadian economy likely continued its uneven path, with growth slowing to a modest 0.1% m/m in May following a solid April. Retail activity slumped as consumers continued to struggle under the weight of high interest rates and the legacy of high inflation.

The softness in spending is even more shocking if you consider population growth of 3%, pointed out BMO. Wholesale trade was a touch lower, offset by a small gain in manufacturing. Housing was mixed in the month with starts higher and sales lower. Hours worked were flat as well, suggesting the risks to BMO's call are tilted to the downside.

Investors will also get a flash estimate for June and Q2 GDP. The Bank of Canada (BoC) pegged Q2 GDP growth at 1.5% annualized, bang on BMO's call, suggesting that June is going to be pretty soft.

The early monthly indicators also point in that direction with modest declines in retail and wholesale sales, and manufacturing activity pulling back sharply. Given the information in hand, June looks like it will see a modest contraction, added the bank.