Canadian Q3 GDP Slows to Annualized 1.3% After Strong Second Quarter Gain 

Canadian economic growth slowed to an annualized rate of 1.3% in the third quarter on lower exports, official data showed on Nov. 29, coming slightly ahead of analysts’ expectations before  the Bank of Canada’s rate decision on Dec. 4.

The data released on Nov. 29 matched a Bank of Canada forecast from October and the market is expecting the central bank to keep rates steady at 1.75%.

“The headlines are bang on expectations but below the surface there is plenty to be optimistic about,” said Adam Button, chief currency analyst at Forexlive, noting the stronger real estate sector and higher consumer spending.

Statscan said business investment grew 2.6% in the third quarter, the fastest pace seen since the fourth quarter of 2017, while household spending accelerated to 0.4%. Housing investment rose 3.2%, the highest gain seen since the first quarter of 2012.

Meanwhile, exports fell 0.4%, while imports were flat, the agency said. The latest data follows a stronger-than-expected performance in the previous quarter. A Reuters poll had predicted third quarter growth of 1.2%.

The Canadian dollar declined, touching 1.3290 to the U.S. greenback or 75.24 cents U.S., after the data release.

A Reuters poll released on Nov. 26 found a slim majority of economists now expect the overnight rate to hold through to the end of 2020.

But analysts cautioned there is a downside risk to fourth quarter growth.

Recent strikes at General Motors in the United States and an eight-day work stoppage a Canada’s largest railway, Canadian National Railway Co. could “temporarily dampen growth a bit more than expected in Q4,” BMO’s Doug Porter said in an interview.

Gross domestic product in September grew 0.1%, Statscan said, on gains in both the services- and goods- producing sectors, matching analysts expectations as well as the 0.1% increase seen in August.

Statistics Canada revised its second quarter annualized figure downwards on Nov. 29 to 3.5% from 3.7% and shifted its first quarter findings higher to 0.8% from an initially reported 0.4%.

In a separate release, Statistics Canada said Canadian producer prices rose by 0.1% in October, on higher energy and petroleum prices.

Source: CNBC

Gross Domestic Product, Income and Expenditure, Third Quarter 2019 

Real gross domestic product (GDP) grew 0.3%, following a 0.9% increase in the second quarter. Third quarter growth was led by higher business investment and increased household spending, boosting final domestic demand by 0.8%.

Expressed at an annualized rate, real GDP advanced 1.3% in the third quarter. In comparison, real GDP in the United States grew 1.9%.

Business investment rose 2.6% in the third quarter, the fastest pace since the fourth quarter of 2017. Growth in household spending accelerated to 0.4%, after rising 0.1% in the second quarter. These increases were moderated by a 0.4% decline in exports, while imports were flat.

Non-farm business inventories were drawn down by $550 million in the third quarter, and the economy-wide stock-to-sales ratio hovered at 0.84. Cannabis inventories contributed to the $4.9 billion accumulation of farm inventories.

For the full report visit: Stats Canada

Retail Trade, September 2019 

Retail sales decreased for the first time in three months, edging down 0.1% to $51.6 billion in September. The decline came from lower sales at motor vehicle and parts dealers and gasoline stations. Excluding these two subsectors, retail sales rose 0.7%.

After removing the effects of price changes, retail sales in volume terms decreased 0.1%.

Rounding out the third quarter, retail sales were up 0.5%, following a 1.1% increase in the second quarter. In volume terms, retail sales were up 0.5% in the third quarter.

Source: Stats Canada