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Yahoo
6 days ago
- Business
- Yahoo
Canada's economy grows by 2.2% annualized rate in first quarter
TORONTO (Reuters) -Canada's economy grew faster than expected in the first quarter, expanding by a 2.2% annualized rate, data showed on Friday. Market reaction: CAD/ LINK: COMMENTS ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS "While headline GDP growth was solid in Q1, it was flattered by a surge in exports as companies looked to front-run potential US tariffs. Domestic demand was weak during the quarter, and monthly data point towards only slight upward momentum heading into Q2." "Early tracking for Q2 - assuming flat readings for May and June - points towards modest growth of 0.5% annualized. While that would clearly be below the economy's long-run potential, suggesting that slack is building up again, it would be better than the Bank of Canada's April MPR (Monetary Policy Report) scenarios." DOUG PORTER, CHIEF ECONOMIST, BMO CAPITAL MARKETS "I think the bottom line here is the economy held up better than most most had expected. We were looking for a decent first quarter but it was better than decent." "On top of that, and maybe the biggest surprise of all today, is the early reading on April is for a small gain following a similar size one-tenth (of a percentage point) increase in March. That's frankly quite impressive." "We can take out the details of the first quarter numbers - they're not nearly as strong as the headline would suggest. But still the overall number is nevertheless important here. There's no real sign of distress in the economy from the GDP figures and I think that's the most important message." "I think this heavily reduces the chances of the Bank of Canada cutting next week." ANDREW KELVIN, HEAD OF CANADIAN AND GLOBAL RATE STRATEGY AT TD SECURITIES "I would say the Q1 numbers being a little bit better than expected is a positive development. Some people may focus on that final domestic demand was effectively flat but a lot of that was due to softer government spending. We did see positive business investment and I think that is really important because that was a category we were looking at to suffer in particular due to uncertainty on the trade front." "We're not yet seeing the signs of a material hit to activity due to trade tensions and for that reason, I think it should be regarded as a positive surprise." "On the basis of the GDP data, it's difficult to make the case for a rate cut in June." "Looking forward, we still expect the economy to show some degree of weakness in the middle part of this year. We still look for growth to be essentially flat for Q2 and Q3, which we think will require additional policy easing from the Bank of Canada."
Reuters
15-04-2025
- Business
- Reuters
VIEW Canada's annual inflation eases to 2.3% in March
TORONTO, April 15 (Reuters) - Canada's annual inflation rate fell to 2.3% in March from 2.6% in February, helped by lower gasoline and travel tour prices. Analysts had expected inflation to remain at 2.6% here. Market reaction: COMMENTARY KATHERINE JUDGE, SENIOR ECONOMIST AT CIBC CAPITAL MARKETS "The easing in price pressures is consistent with the Bank of Canada cutting interest rates by 25 bps (basis points) at tomorrow's meeting, with the downside risks to growth from the trade war outweighing any upside to inflation from tariffs in our view." ANDREW KELVIN, HEAD OF CANADIAN AND GLOBAL RATES STRATEGY, TD SECURITIES "Big downside surprise offsets the previous month's big upside surprise ... I don't think this changes much for the Bank of Canada for April." "I think their mind is probably more or less made up heading into this print and you are still talking about CPI inflation that is close to the bank's target, you are still talking about core inflation metrics that are well above the bank's target and that core inflation momentum - it's 2.74% on a 3-month annualized basis - it's certainly not something that's going to produce panic at the Bank of Canada given that they've signaled that they want to wait until they have a bit more information on how the trade disruptions are going to impact the Canadian economy, particularly the inflation expectations side. I do expect they will hold (rates steady) in April." DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS "Definitely on the surface, better than expected, milder than expected. ... It's a bit of a mixed message from this report. I'd say overall the Bank of Canada is probably a little bit more comfortable with this result than what we saw last month, but it's still not great. It probably doesn't give them a whole lot of comfort. ... Does (the bank) look in the rearview mirror at still relatively sticky core inflation, or does it look forward knowing that the consumer and business sentiment has crumbled and the economy is likely to weaken in this quarter? That's a tough call. ... I don't think anyone's going to question their wisdom if they decide to trim tomorrow."
Reuters
04-04-2025
- Business
- Reuters
VIEW Canada's economy sheds 32,600 jobs in March
TORONTO, April 4 (Reuters) - Canada's total employment fell and the unemployment rate ticked up to 6.7% in March, data showed on Friday, as uncertainty around tariffs and their subsequent implementation took a toll on hiring and spurred some layoffs. Market reaction: Link: opens new tab COMMENTARY ANDREW GRANTHAM, SENIOR ECONOMIST, CIBC CAPITAL MARKETS "The wheels may be starting to fall off the Canadian labour market, with a 33K decline in jobs during March falling well short of consensus forecasts for a 10K gain." "Overall, today's report was clearly weaker than expected, although next week's BoC surveys and global risk sentiment will also be key in determining whether the Bank continues to cut interest rates or elects to skip a meeting later this month." "There was high breadth so the details tend to bolster how bad the headline was. The one thing I would flag though is that I think we are somewhat cooking the books in terms of the seasonal adjustment factors. It was the lowest seasonal adjustment factor for the month of March on record so that amplified or distorted some of the downside ... It was soft but I think that's a big caveat around the number."
