RE:Q1 Real GDP Tracking at 2.5% Look at March and look at oil prices. Not good for Canada.
-The deeply inverted yield curve
-many mortgages in Canada still have to get renewed at much higher rates. Remember that if you had a 5 year term in 2018/2019 then these come up for renewal in 2023 and 2024. That's when the fun starts.
- homeowners that purchased homes in 2021/2022 with smaller down payments are likely under water on their home purchase. They can easily walk away when these mortgages come up for refinancing.
- people on variable rates/fixed payment have hit the trigger rate which is when your payments cannot even cover the interest expense. They are effectively not paying down the mortgage but only adding to it. Up to 80% of variable rate borrowers have hit the trigger rate. What happens when these people renew their mortgage?
- wages are not keeping up with mortgage/rent payments
- mortgage debt is ~ 100% of gdp, higher than the GFC
- Canada relies heavily on exports to boost gdp numbers. A slow down in global output will be a big blow to gdp numbers. I.e, US goes into recession.
I will say one last comment.
The unemployment rate is a lagging indicator and it's always the last shoe to drop.