Canada’s Economy Unexpectedly Shrinks, Supporting Rate Pause
- GDP falls 0.2% in second quarter, missing estimated 1.2% gain
- Traders pare back bets on a hike at next week’s meeting
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The Canadian economy is off to a weak start in the second half of this year after unexpectedly contracting in the second quarter, cementing the case for the Bank of Canada to hold rates steady next week.
Preliminary data suggest gross domestic product was flat in July, as increases in the public, finance and professional sectors were offset by decreases in manufacturing, transportation and construction industries, Statistics Canada reported Friday in Ottawa. That followed a 0.2% contraction in June, matching the median estimate in a Bloomberg survey of economists, and a downwardly revised 0.2% expansion in May.