Thursday, April 28, 2016

First Estimate First Quarter 2016 US GDP 0.5%, What About Ontario's?

The first estimate of the US GDP for the first quarter of 2016 came in this morning at only 0.5% annualized, which I believe with population growth factored in means per capita GDP growth was slightly negative. First quarter numbers have been weak in the US the last few years, even with seasonal GDP adjustments. The fourth quarter number for 2015 was only 1.4%.

Last year's first quarter number was 0.6% so the number was quite similar. Certainly this year the strong US dollar relative to other currencies didn't help the GDP number.

For Canada and Ontario, the poor US performance to me is interesting for what it says about our GDP numbers. For Ontario especially, the low Canadian dollar in the first quarter helps exports and decreases imports to the US including travel. So a stronger Ontario GDP in the first quarter is certainly possible compared to last year (I believe Ontario's first quarter number in 2015 was around 0.8% annualized (it was revised upward considerably from the first estimate)). The Canadian dollar didn't really start becoming much stronger until the first quarter was done. However Ontario's GDP number does somewhat depend on auto exports to the US which weren't particularly strong for the quarter. So who really knows.


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