Canadian Fourth Quarter 2012 GDP Predictions Not Looking Good

This Globe article has some interesting info on predictions for Canada's GDP in the fourth quarter. First on lower inflation:

"Statistics Canada said on Friday that lower gas prices helped push the annual inflation rate down to 0.5 per cent in January from 0.8 per cent in December, the lowest since the 0.1 per cent recorded in October 2009."

That's interesting that inflation is so low, but with gas prices cranking back up in February, what happens to future inflation readings?

The retail sales numbers for December weren't good either:

"The 2.1-per-cent fall in seasonally adjusted retail sales in December from November was far larger than the 0.3-per-cent decline predicted by market operators and suggested already muted expectations for fourth quarter growth might be too optimistic."

And finally predictions on fourth quarter GDP growth:

"Last month the Bank of Canada already cut its fourth quarter growth forecast to 1.0 per cent from 2.5 per cent. December growth is likely to be disappointing given poor manufacturing and wholesale and now retail trade. Statscan is to release December and fourth quarter gross domestic product data on March 1."

That's not good and I can't think that Ontario's will be that much different, although lower growth in Alberta due to lower commodity prices could be dragging down the federal number. Then again, if retail numbers are down, that can't be a great portent for Ontario.

This Stats Can page said that third quarter growth for 2012 was only 0.6% on an annualized basis, so that could well mean two quarters under 1% in a row which isn't going to be good for government revenues. I'm still waiting for the official third quarter number for Ontario. Higher or lower than 0.6%? Considering Canadian population growth is over 1% a year, that's basically a decline in GDP growth per capita and that's problematic for tax revenues and not good news for Kathleen Wynne.

The first quarter doesn't seem that fantastic, although US numbers have picked up a bit. Gas prices are high in Ontario and that can't help retail says here much.