{"id":99423,"date":"2025-12-04T03:00:01","date_gmt":"2025-12-04T08:00:01","guid":{"rendered":"https:\/\/quotulatiousness.ca\/blog\/?p=99423"},"modified":"2025-12-03T10:51:27","modified_gmt":"2025-12-03T15:51:27","slug":"dont-put-a-lot-of-trust-in-the-surging-canadian-gdp-stories-theyre-pushing","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2025\/12\/04\/dont-put-a-lot-of-trust-in-the-surging-canadian-gdp-stories-theyre-pushing\/","title":{"rendered":"Don’t put a lot of trust in the “surging Canadian GDP stories” they’re pushing"},"content":{"rendered":"

On the social media site formerly known as Twitter<\/em>, Stephen Punwasi<\/a> put together an interesting thread on the latest “rosy scenario” GDP numbers the state media have been making such a big deal about:<\/p>\n

\"\"<\/a><\/p>\n

2\/ What do we see? Imports contributed 0.7 points out of 0.6 points of Q3 GDP growth. The rest of the economy was a net drag.<\/p>\n

Imports contribute to GDP as a part of net exports: exports minus imports. <\/p>\n

Smaller imports boost net exports. Imports made the biggest drop since 2022.<\/p>\n

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3\/ What we’re seeing is a phenomenon called import compression: the balance was boosted by falling imports.<\/p>\n

It’s a superficial improvement due accounting mechanics. The only growth is actually weakness. <\/p>\n

We figured it out. But wait \u2014 how do they get import\/export data? \ud83d\ude2c<\/p>\n

\n

4\/ Let’s start with imports. I recalled reading about the CBSA’s new customs & revenue management (CARM) platform. <\/p>\n

Totally normal bedtime reading for weirdos, I know.<\/p>\n

CARM delayed data to StatCan, who had to estimate on trend & revise. I can’t recall the issue being resolved.<\/p>\n

\n

4\/ I contact StatCan. Delays have improved but recent data is heavily impacted.<\/p>\n

They warn to expect larger than usual revisions to September \u2014 a third of Q3. \ud83d\ude05 <\/p>\n

It gets funnier: \ud83c\uddfa\ud83c\uddf8’s gov shutdown means \ud83c\udde8\ud83c\udde6 can’t get data for ~75% of its exports. Trend estimate again.<\/p>\n

\n

5\/ so all GDP growth was imports, which fell faster than exports.<\/p>\n

Imports & exports are estimates based on trend.<\/p>\n

But wait \u2014 what exactly is a trend? It’s based on seasonal adjustments \u2014 smoothing predictable variation.<\/p>\n

In \ud83c\udde8\ud83c\udde6, that means suppressing summer & boosting winter.<\/p>\n

\n

6\/ non-predictable variations to consumption like recession & trade wars can’t be filtered out.<\/p>\n

The adjustment over\/understates. e.g. \ud83c\uddfa\ud83c\uddf8 Fed research shows this overstated recovery & lengthened the financial crisis. Ditto with COVID. <\/p>\n

It can’t be fixed until years later.<\/p>\n

\n

7\/ let’s put this together: <\/p>\n

– \ud83c\udde8\ud83c\udde6’s GDP grew exclusively due to the trade balance. <\/p>\n

– import compression \u2014 a weakness that overstates growth<\/p>\n

– trade had to be inferred via trend<\/p>\n

– trend overstated by irregular shock <\/p>\n

Yup.<\/p>\n

\n

8\/ just to clarify \u2014 none of this is StatCan’s fault. <\/p>\n

They’re tasked w\/a deadline over the past year & \ud83c\udde8\ud83c\udde6 decided to overhaul its trade data during a trade war. <\/p>\n

They told me Dec 11th will be when revisions for imports come in & we’ll get an update on CARM.<\/p>\n

\n

9\/ Bonus fun facts for the pros: <\/p>\n

– by pushing it back to the 11th, this overstatement helps suppress yields for the GoC cash management program <\/p>\n

– the 11th is after the last auction data is provided to dealers<\/p>\n

Fascinating combo while \ud83c\udde8\ud83c\udde6 is asset cycling for short-term optics.<\/p>\n

\n

10\/ anyway, full write up, direct quotes from StatCan, & a fun bonus GDP fact for the kiddos. <\/p>\n

Also, follow @BetterDwelling<\/a> if you found this interesting. <\/p>\n

We take research & insights reserved for deep-pocketed investors & give it away to normies w\/plain english explanations.<\/p>\n

\"\"<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

On the social media site formerly known as Twitter, Stephen Punwasi put together an interesting thread on the latest “rosy scenario” GDP numbers the state media have been making such a big deal about: 2\/ What do we see? Imports contributed 0.7 points out of 0.6 points of Q3 GDP growth. The rest of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,25,84,28],"tags":[1094,290],"class_list":["post-99423","post","type-post","status-publish","format-standard","hentry","category-cancon","category-economics","category-government","category-media","tag-gdp","tag-statistics"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-pRB","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/99423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=99423"}],"version-history":[{"count":4,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/99423\/revisions"}],"predecessor-version":[{"id":99429,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/99423\/revisions\/99429"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=99423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=99423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=99423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}