Canadian GDP report on Friday: Are we hanging by a thread?

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Canadian gross domestic product for the fourth quarter will be released Friday at 8:30am, and investors may want to watch through their fingers like it's Friday The 13th Part IX. Though hopes remain that the slowdown is in the rearview mirror, recent economic indicators have been very disappointing.

The consensus estimate is for GDP growth of 0.6 per cent annualized for the last three months of 2012, which includes a 0.2 per cent contraction for the domestic economy in December. Economists, however, have had considerable difficulty predicting data so far in February, consistently over-estimating the strength of the economy.

This chart shows the major economic statistics released so far this month compared to estimates. Missing is the employment for January report released on February 8 because it was so terrible – showing a loss of 22 thousand jobs when a gain of 5 thousand was expected – that it doesn't fit on the chart.

Manufacturing sales and wholesales sales reports came in well below expectations, indicating declining manufacturing activity – a trend that does not bode well for the struggling Ontario economy. The retail sales less autos report, which came in 1.7 per cent below estimates with a decline of 2.1 per cent, indicated that the notoriously indebted Canadian consumer was little better.

All of these data points, thankfully, are backwards looking and could merely represent a brief bout of economic paralysis caused by the U.S. "fiscal cliff"-related uncertainty. Investors can hope for a resumption of growth when employment numbers for January are released on March 8.

Scott Barlow is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow Scott on Twitter at @SBarlow_ROB.