Comparing these numbers with the revised U.S. GDP data, which reduced an acceptable 2.4% for Q2 down to a mere 1.6%.

Canada’s second quarter gross domestic product is expected to show only about half the growth posted in previous quarters, consistent with the general slowdown that has occurred in the U.S. as near-term stimulus has run out and business productivity gains have already been locked in and accounted for.  The real laggards in the U.S., however, are soft employment and housing data, which, of course, is where the real economy is at.

Canadian monthly GDP figures for June will also be released on Tuesday.  Derek Abma of the Financial Post writes that “while there have been some months recently that have seen little or no economic expansion, an outright contraction hasn’t shown up since August 2009.”

On Monday, Stats Can will release figures for the current trade account, which measures the amount of economic exchange in the form of trade that Canada does with the rest of the world.  Since Q4 2008, Canada has been importing more than it has been exporting.  This is no doubt due to the financial crisis and global slowdown in consumption.  At least it shows that Canada’s consumers are still strong, even though our trade partners are not buying as much from us.

A Double Dip in Canada?

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Alot of U.S. analysts and armchair investors are itching for a “bubble” to pop in Canadian housing.  They want to think that the same thing will happen to Canadian real estate as happened in the U.S. markets – but they’re wrong.  Canada does have a small subprime housing lending market, but it’s not at all like the one that developed in the U.S.  Lending standards were always stricter and there was less predatory lending.  There were never any NINJA loans.

Could there be a double dip in Canada? Is there going to be a double dip in the U.S.?   I think the terminology of the “double dip” is a bit of a red herring.  Is there another major slowdown in the U.S.?  Yep, we’re seeing it right now.  Will it affect Canada?  Yep, to the extent that we still export to the U.S.

The “double dip” terminology applies more to markets than it does to the economy.  It’s not clear how much worse the actual economy can get in the U.S.  There will continue to be some more foreclosures, but there really aren’t any more bubbles left to pop at the level of goods and services.  It seems hard to imagine unemployment getting worse than it currently is – unless, of course, there’s another market collapse and valuations plummet and pensions are lost again.

On the other hand, economists have been warning about a bubble in US Treasuries.  Some yields are at their all-time lows.  And if the bond market is smarter than the stock market – as many would argue – it may be a leading indicator of where stocks are headed in the near-term future.