Canada Economy Surprisingly Shrank 1.1% in Third Quarter

Business
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  • Canadian economy contracted in Q3, but slight rebound in growth in October
  • GDP rose 0.2% in October, strongest monthly growth since May
  • Q3 GDP shrank at 1.1% annualized pace, weaker than survey estimate and Bank of Canada forecast
  • Economy has essentially stalled with weak household spending
  • Bank of Canada’s interest rates may crimp consumption and slow inflation
  • Traders betting on rate cuts by June, economists see April as more likely timing
  • Next rate decision on Dec. 6, majority expect rates to remain unchanged
  • Governor Macklem expects weak economy for next few quarters, more downward pressure on inflation
  • Lower exports and slower inventory accumulation led to Q3 decline
  • Signs that higher rates are cooling the economy