Canada's Economy Grew 0.3% In Third Quarter

What happened

A preliminary estimate shows Canada's economy grew an annualized 0.3% in the third quarter, Statistics Canada said, based on no growth in August and a 0.1% decline in September. The estimate will be revised in November.

Confirmed

Global impact / market context

Slower growth limits how much cash companies generate, which can reduce hiring and capital spending. It also gives the Bank of Canada a reason to weigh weaker activity against inflation when setting interest rates, which affect borrowing costs for households and businesses.

Analyst inference

The data arrives after the Bank of Canada raised rates by 25 basis points, which means a quarter of a percentage point, to fight inflation. Weak growth alongside high energy costs and U.S. tariffs puts pressure on company revenue and costs across retail, manufacturing and wholesale trade.

Analyst inference

What to watch

1. Statistics Canada will revise the third-quarter estimate in November, and the updated figures could show different growth than the preliminary 0.3% annualized reading released now. Confirmed
2. Watch whether the Bank of Canada slows or pauses further rate increases if growth stays weak, since lower rates would reduce borrowing costs for companies and households. Proposed
3. Watch wholesale trade and manufacturing output in coming months, because a 1.4% wholesale decline and only nine of 20 sectors expanding signal uneven demand that can pressure company revenue. Analyst inference

Evidence

• baystreet.ca