Posthaste: Canada 'stands out' on this economic surprise index

Canada may stand out on the global economic surprise index, but it’s for posting poor results, say National Bank of Canada economists.

“Disappointing economic data is not a global phenomenon right now,” Taylor Schleich and Ethan Currie said in a note on Tuesday. “Canada stands out as an underperformer among major economies, particularly against the United States.”

New York-based Citigroup Inc. operates the economic surprise indexes, which measure data surprises against market expectations. A positive reading means numbers have come in ahead of expectations, while a negative one means they have missed expectations.

Canada on Tuesday was at minus 88.2, a big drop from a positive reading of around 100 at the end of last year. The U.S., where labour and retail data have recently come in better than expected, was at 43.7, making for the biggest gap on the index between the two neighbours in four years.

National Bank’s economists aren’t surprised by Canada’s poor showing.

“Economic data in Canada has stumbled out the gate so far in 2026,” they said, citing year-to-date jobs losses and several employment misses compared with analyst expectations.

For example, the country has shed more than 110,000 positions since the start of the year. Economists forecasted the economy would add 10,000 jobs in May, but it lost almost 18,000.

The biggest miss of the year, however, came in March, when the economy lost 84,000 positions versus forecasts of it adding 10,000.

But Canada’s recent poor showing on Citi’s index isn’t its worst. That came in late 2022, when its score fell to its lowest level of nearly minus 150 because the economists said the Bank of Canada “was bludgeoning the economy with rate hikes” due to rising inflation, partly spurred by an energy supply shock after Russia declared war on Ukraine.

Canada’s economic numbers were worse in the latter part of 2022, but the economy had been spitting out positive inflation surprises and momentum was building prior to the Bank of Canada rate hike campaign, they said.

The economic echoes of today — an oil supply crisis and inflation worries — are similar, but Schleich and Currie wonder whether geopolitics or bad economic surprises hold more sway on the outlook for interest rates.

There have been times when geopolitical events have pushed economic data to the sidelines in terms of the interest rate path, they said. For example, Canada produced some stronger-than-expected numbers in early 2025, but markets focused on the threat posed by U.S. tariffs.

The Bank of Canada continued to cut interest rates throughout 2025, taking them to 2.25 per cent from 3.25 per cent at the start of the year as it tried to diminish the effect of Donald Trump’s tariff war.