Statistics Canada reported Friday that real gross domestic product rose 0.3 per cent in April – matching its initial estimate for the month – after remaining essentially unchanged a month earlier.
However, early May figures from the agency suggest the pace of growth has not continued and has slowed to 0.1% for the month.
The chief economist of Bank of MontrealBMODoug Porter, said growth, overall, held up a little better than expected in 2024, but remained generally lackluster.
For the Bank of Canada, this doesn’t change much, because growth is still a little below its potential, which probably means a further rise in the unemployment rate and a further moderation in underlying inflation.
As long as the latter assumption holds true, further rate cuts will eventually come. We still anticipate the next cut in September.
he added.
The Bank of Canada reduced its key interest rate (new window) earlier this month for the first time since the early days of the pandemic and although it is expected to cut its rate again, the timing is uncertain.
Statistics Canada reported that annual inflation in May was 2.9%, up from 2.7% in April, a result that dampened financial market expectations of a rate cut in July.
The economy’s growth in April came as 15 of 20 sectors expanded during the month, with both goods-producing and service-producing industries contributing to growth.
Service-producing industries increased 0.3%, with the wholesale trade sector jumping 2% in April. Retail trade also gained 0.5% for the month.
The arts, entertainment and recreation sector posted a 0.9% increase, while accommodation and food services gained 1.2%. The finance and insurance sector added 0.4%.
During the same period, goods-producing industries grew by 0.3%, with mining, quarrying and oil and gas extraction increasing by 1.8%.
The manufacturing sector grew 0.4% in April, while the construction sector slipped 0.4%.
