Posthaste: This cratering GDP number has only ever been seen during a recession

financialpost.com:

Canada’s February gross domestic product numbers were disappointing in more ways than one.

Statistics Canada data released Tuesday showed the economy grew 0.2 per cent for the month — below analysts’ estimates of 0.3 per cent and StatsCan’s own advanced forecast of 0.4 per cent — revealing an economy that is losing steam.

However, the reading that put economists most on edge was GDP per capita.

The closely watched measure continued to crater and is now down three per cent from its peak in September 2022, according to Matthieu Arseneau, deputy chief economist at National Bank of Canada.

“A decline of this magnitude has never been recorded outside of a recession,” Arseneau said in a note following the GDP release. He estimates first quarter annualized GDP per capita currently stands at -1.2 per cent, and at -0.3 per cent non-annualized.

GDP per capita was also on the Royal Bank of Canada‘s radar.

Weaker-than-expected GDP coupled with Statistics Canada’s forecast for flat growth in March, “leaves output for Q1 as a whole tracking (by our count) a seventh consecutive per-capita decline,” RBC economist Claire Fan said in a note.

Fan said the bank estimated GDP per capita declined 0.5 per cent in the first quarter from the fourth quarter of 2023.

GDP per capita matters because “it is an indicator of the average standard of living of the population,” Arseneau said in an email. “Higher population growth naturally leads to better economic growth.”

Not this time around.

Economists have credited Canada’s record population increase with keeping the economy out of technical recession territory, defined as two consecutive quarters of negative growth. However, on a per-person basis there has been “significant underperformance,”