Canada's Economic Growth: A Mixed Bag in the Third Quarter

Canada's economy grew at an annualized rate of 1% in Q3, driven by household and government spending, despite declines in business investment and exports. While GDP growth fell short of expectations, upcoming economic reports, including employment data, could influence future monetary policy decisions by the Bank of Canada.

Canada's economy experienced a modest growth of 1% annualized in the third quarter, as reported on Friday, with household and government spending playing pivotal roles. However, this growth was partially counterbalanced by lower business investments and exports, missing anticipated monthly gains of 0.3% and only reaching 0.1%.

The second quarter's growth was adjusted slightly to 2.2% from an earlier 2.1%. These data points, alongside an upcoming employment report, are crucial for the Bank of Canada's upcoming decision on rate cuts set for December 11.

Household spending rose by 0.9% alongside government expenditures, sustaining the economy and countering potential recession, buoyed by population growth. The third quarter's GDP per person declined by 0.4%, marking the sixth consecutive decline, underscoring the need for monetary policy adjustments.

(With inputs from agencies.)