08:22 AM EDT, 08/01/2024 (MT Newswires) -- Canadian real gross domestic product (GDP) growth Wednesday came in a tad above the expected number in May -- expanding 0.2% m/m (a weak point-two as the number was +0.156% to the third decimal place), which these days classifies as a veritable economic boom, said Rosenberg Research.

While this topped the consensus estimate of 0.1% m/m growth, it did reflect a deep slowing from the +0.3% m/m headline growth investors saw in April. The advance estimate from Statistics Canada shows a 0.1% m/m uptick, but that likely will prove overly optimistic given the other monthly data at hand.

While it was encouraging to see some life emerge in the "moribund" manufacturing sector, with activity here expanding 1.0% m/m on top of the 0.5% m/m rebound in April, it is still in a 2.1% hole on an annual basis, stated Rosenberg Research.

Just about half the growth in May came from the public sector. Transportation was muted with just a 0.1% gain, while growth in the financial services sector was cut in half to show a 0.2% m/m uptick from 0.4% in April.

Construction barely showed any pulse, with the 0.1% m/m uptick falling well short of recouping the 0.6% April shower. Both the retail (-0.9%) and wholesale (-0.8%) sectors fell hard -- so it's now abundantly clear to the Bank of Canada (BoC) that the most interest-sensitive segments of the economy are in "duress" (retail sector volumes are running at a 2.0% annual rate drop over the past three months and wholesale volumes are down 2.6%.

If the StatsCan June estimate is to be taken at face value, it means that Q2 real GDP growth should come in north of a +2.0% annual rate, added Rosenberg. But that is still below potential, which means disinflationary economic slack continues to build, and that is also more than a full

percentage point below prevailing population growth.

So, the dismal state of affairs surrounding decay in real per capita real GDP continues unabated. Momentum into Q3 is

fairly subdued, and it will take a whole lot for Canada's central bank to reach its lofty 2.8% annualized growth projection for the current quarter. The bar has been set low for additional rate relief.