Stuck at home, Canadians—and indeed consumers in most countries—have spent less on services such as gym memberships or travel. As a result, many services prices have been rising more slowly than usual. In January, the rate of increase in prices of services, excluding shelter, was 1.6% in Canada. But, unable to buy the services they wanted, consumers have shifted to goods.
The most recent survey indicators point to a broadly similar pace of real GDP growth in the third quarter of the year. Overall, we expect the economic recovery to continue, albeit dampened, in particular, by weaker than expected foreign demand.