Canada August GDP - Economy looks weaker than BoC thought
August Canadian GDP fell short of a positive 0.2% preliminary estimate and came in unchanged for a second straight month. The preliminary estimate for September is for a 0.1% decline, suggesting the economy may be weaker than the BoC thought when tightening rates this week.
The latest data coupled with September’s preliminary estimate is consistent with a 1.3% annualized Q3 GDP increase, below a 2.0% BoC estimate in this week’s Monetary Policy Report. The BoC expects a slowing to 0.8% in Q4 as US tariffs hit. A decline in September GDP would get the Q4 base off to a weak start.
The August monthly detail shows goods relatively resilient with a 0.1% increase, with manufacturing and construction both recording modest gains. Services however fell by 0.1%. A 1.4% decline in wholesale was largely offset by a 1.2% rise in retail. Most components were fairly flat with a 0.8% decline in public administration a significant negative.
