Market News

OTTAWA, Sept. 29 (Reuters) — Canada’s economic growth was flat in July, data showed on Tuesday, in line with expectations and signaling a slower start to the third quarter after solid growth in the previous three months.

The result followed three consecutive months of positive growth and came just before a new set of U.S. tariffs on Canada took effect in August.

Key Details

• Both goods-producing and services-producing industries were largely unchanged in July, Statistics Canada said. Goods-producing sectors account for roughly a quarter of gross domestic product.
• Among goods-producing industries, manufacturing output decreased 0.9% in July, recording its first decline in four months. The decline was primarily driven by lower activity at petroleum refineries, which fell 6.2% during the month.
• Mining, quarrying, and oil and gas extraction declined 0.5%, marking a second consecutive monthly decline, Statistics Canada said.
• Utilities and construction grew by 1.7% and 1.3%, respectively, offsetting most of the decline. Construction increased for a fourth consecutive month.
• Among services-producing industries, retail trade contracted 1%, while wholesale trade declined 0.4% in July. Wholesale trade had been among the biggest contributors to growth in June.
• Professional, scientific and technical services rose 0.3% in July, their largest monthly increase in 20 months.
• Real estate, rental and leasing activity increased 0.2% in July, with real estate expanding for a sixth consecutive month.
• An advance estimate from Statistics Canada indicated that the economy was likely to rebound in August, with monthly growth of 0.2%. The increase was expected to be led primarily by higher output in mining and quarrying and retail trade.
• The Bank of Canada has forecast annualized economic growth of 1.5% in the third quarter.
• Money markets are pricing in a 25-basis-point interest rate hike in December, even though most economists have forecast no change in interest rates throughout the year.
• The Canadian dollar was trading 0.06% lower at C$1.4179 per U.S. dollar, or 70.53 U.S. cents.
• Yields on two-year Canadian government bonds fell 3.1 basis points to 2.567%.