{"id":956176,"date":"2026-11-03T01:58:11","date_gmt":"2026-11-03T01:58:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/956176\/"},"modified":"2026-11-03T01:58:11","modified_gmt":"2026-11-03T01:58:11","slug":"what-economists-had-to-say-about-canadas-latest-gdp-data","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/956176\/","title":{"rendered":"What economists had to say about Canada’s latest GDP data"},"content":{"rendered":"

Canada\u2019s economic growth is expected to continue slowing in the fourth quarter, raising concerns of another interest rate<\/a> hike by the Bank of Canada<\/a> in December.<\/p>\n

Economists said the economy grew by 1.3 per cent on an annualized basis in the third quarter but is still below the Bank of Canada\u2019s outlook of two per cent.<\/p>\n

These figures came after Statistics Canada reported Friday that real gross domestic product<\/a> was flat in August and contracted 0.1 per cent in early September, according to a flash estimate.<\/p>\n

Here\u2019s what economists think the latest GDP data means for the Bank of Canada\u2019s next move. <\/p>\n

\u2018This big cooldown may be somewhat overstated\u2019: Bank of Montreal <\/p>\n

\u201cCanadian real GDP was surprisingly soft in the late summer, as the US\/Canada trade<\/a> dispute flared right in the middle of the quarter,\u201d Douglas Porter, chief economist at BMO Financial Group, said in a note.<\/p>\n

Porter explained that nine out of the 20 industries recorded growth, nine contracted, and two remained unchanged, adding that the dip in August GDP was \u201conly at the third decimal place.\u201d <\/p>\n

He said \u201cdecent gains\u201d in manufacturing and construction were offset by a 0.8 per cent drop in public sector activity, due to the continued winding down of the \u201cmajor special factor\u201d \u2014 2026 census activity \u2014 though \u201cthat only clipped GDP by just under half a tick.\u201d <\/p>\n

\u201cBut just as we suspected that the Q2 strength was overstated, this big cooldown may be somewhat overstated, especially since some of it is census-related,\u201d he said. <\/p>\n

With ongoing trade tensions, weakness in the housing market, and concerning employment figures, Porter said growth has \u201crun into some pretty serious headwinds\u201d and is unlikely to pick up in the fourth quarter. <\/p>\n

\u201cFor the Bank of Canada, markets are leaning to better than 50-50 odds of a follow-up hike in December, but more soft signs like this will get those odds pulling back.\u201d <\/p>\n

\u2018Weak handover to the fourth quarter\u2019: Capital Economics <\/p>\n

\u201cThis is not only far below the Bank of Canada\u2019s upwardly revised 2.0 per cent forecast but even lower than our pessimistic 1.5 per cent figure,\u201d said Bradley Saunders, North America economist at Capital Economics, in a note, referring to the country\u2019s projected 1.3 per cent annualized growth in the third quarter. <\/p>\n

Saunders said real GDP results, \u201cacting also as a weak handover to the fourth quarter,\u201d reinforce Capital Economics\u2019 view that \u201cthe next rate hike won\u2019t come until 2027.\u201d <\/p>\n

He added that the agency did not anticipate a census-related 0.8 per cent decline in economic activity in the public sector. <\/p>\n

\u2018Disappointing report relative to expectations\u2019: TD Economics <\/p>\n

\u201cThis was a disappointing report relative to expectations and, more importantly, Statistics Canada\u2019s guidance for September looks no better,\u201d Marc Ercolao, an economist at TD Economics, said in a note, adding that although growth is positive, it\u2019s still \u201cnotably\u201d below the central bank\u2019s recent projection. <\/p>\n

\u201cFor the Bank of Canada, today\u2019s report may cast a little more doubt around the durability of the recovery heading into 2027,\u201d he said. <\/p>\n

He cautioned against another interest rate hike in December. <\/p>\n

Signs of weaker economic growth, especially with trade uncertainty and higher energy costs, could make it harder for the Bank of Canada to justify raising interest rates, he said, despite its concerns about rising inflation<\/a>.<\/p>\n

\u2018Supportive of the Bank holding fire for now\u2019: CIBC <\/p>\n

\u201c(Friday\u2019s) data suggested that the Canadian economy was already struggling for momentum even before (Wednesday\u2019s) interest rate hike,\u201d CIBC Capital Markets\u2019 senior economist Andrew Grantham said in a note. <\/p>\n

He added that the latest GDP results suggest the economy may have entered the fourth quarter with \u201cweaker\u201d momentum than the Bank of Canada anticipated, despite already forecasting GDP growth below one per cent. <\/p>\n

\u201cThere\u2019s plenty more data to be released\u2026 but today\u2019s release is supportive of the Bank holding fire for now on a further interest rate hike,\u201d said Grantham. <\/p>\n

\t\tEditor\u2019s Picks\t<\/p>\n","protected":false},"excerpt":{"rendered":"Canada\u2019s economic growth is expected to continue slowing in the fourth quarter, raising concerns of another interest rate…\n","protected":false},"author":2,"featured_media":956177,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,3607],"class_list":["post-956176","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-gdp"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/956176","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=956176"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/956176\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/956177"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=956176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=956176"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=956176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}