In this special edition of the Economic Pulse, RBC Deputy Chief Economist Dawn Desjardins provides an in-depth summary of three key themes from the September 2021 Macroeconomic Outlook report.

Theme 1: Countries on the road toward pre-pandemic GDP

Most of the countries we cover managed to plow through the second quarter posting strong gains with the US even surpassing its pre-pandemic level of GDP. Canada, however, was the outlier and GDP fell in the quarter mainly due to restrictions remaining in place longer than in other countries.

While these headwinds will continue to blow in the months ahead, we do not expect them to push the economies off course with high vaccination rates making another round of restrictions unlikely and supply chain and labour shortages likely to abate as activity levels return to more normal levels.


Theme 2: Canada hits a bump in Q2

In Canada, the second quarter provided a negative surprise with GDP falling at just over a 1% annualized rate. The sources of the weakness included a pullback in spending on goods, a drop in residential investment and sharply lower exports.


Theme 3: Business investment to increase

Business investment was one of the bright spots in the second quarter as companies geared up to meet rising demand. While many business are investing to increase capacity, they are facing challenges getting workers.

As Deputy Chief Economist, Dawn contributes to the macroeconomic and interest rate forecasts for Canada and the U.S. Before joining RBC, Dawn worked as a reporter for Bloomberg Financial News in Toronto covering the Canadian bond and currency markets. She also spent ten years as the Canadian bond market strategist for a major U.S. bank.

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