Jan. 31 (Bloomberg) -- Canada’s gross domestic product grew at the fastest pace in eight months in November on increases in oil production, wholesaling and retailing.
Output rose 0.4 percent to a seasonally adjusted annual rate of C$1.24 trillion ($1.24 trillion) in November following a 0.2 percent expansion in October, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast a 0.3 percent gain, based on the median of 22 forecasts.
The Bank of Canada said earlier this month that weaker-than-expected growth means “slack” in the economy won’t be used up until the end of 2012, even with a boost linked to U.S. stimulus measures. The central bank kept its key interest rate at 1 percent Jan. 18 and said future increases would be “carefully considered,” with a strong currency and poor productivity restraining exports.
“I can’t see too much to complain about,” said Jacqui Douglas, senior economics and currency strategist at TD Securities in Toronto by telephone. “The Bank of Canada does have plenty of time to wait before hiking rates again,” she said, predicting a move in July.
The Canadian dollar rose 0.4 percent to 99.79 cents per U.S. dollar at 9:29 a.m. in New York, from C$1.0013 Jan. 28. One Canadian dollar buys $1.0022.
Oil and gas extraction grew 2.4 percent in November after the completion of refinery maintenance, Statistics Canada said, while temporary automobile plant shutdowns lowered factory output by 0.8 percent. Wholesaling rose 1.5 percent led by machinery and equipment and retailing gained 1.4 percent.
Wal-Mart Stores Inc., the world’s largest retailer, said Jan. 26 it will open 40 “supercenters” in Canada by the end of January 2012, creating 9,200 construction and store jobs.
Construction output declined 0.4 percent in November on new residential projects. Gains in existing home sales led to a 7.6 percent increase in output from real estate agents and brokers, while the finance and insurance sector gained 0.7 percent on increased stock trading and mortgages and personal loans.
Gross domestic product expanded 3 percent in November from a year earlier, Statistics Canada said today, down from a 3.4 percent pace in October.
The Bank of Canada has predicted that output likely expanded at a 2.3 percent annualized pace between October and December, lower than its prior 2.6 percent forecast. The growth rate will accelerate to 3 percent in the second half of this year, the bank said.
Today’s report shows the economy is set to grow by about 2.3 percent in the fourth quarter, said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto.
“Once the Bank of Canada becomes reassured about strengthening growth in both Canada and the U.S., we expect it to return to gradually tightening monetary conditions,” possibly in the second quarter, he wrote in a note to clients.
Consumer spending in the U.S. rose a more-than-forecast 0.7 percent in December, capping its strongest quarter in more than four years, Commerce Department figures showed today in Washington.
A separate Statistics Canada report showed that factory prices and raw materials costs both rose faster than economists predicted last month, led by petroleum and metals.
The industrial product price index rose 0.7 percent in December from November. The median estimate in a Bloomberg survey of 16 economists was for a 0.6 percent increase.
The raw-materials price index rose 4.2 percent, Statistics Canada said, versus economist predictions for a 4 percent increase, according to the median estimate in a Bloomberg survey with 14 responses.
On a yearly basis, industrial price gains lagged behind raw materials cost increases. The industrial price index rose 2.9 percent in 2010, while the raw materials index rose 13.2 percent, the report said.
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