The Canadian economy topped expectations with growth of 0.5 per cent in May. The month-over-month increase was a strong rebound from a rise of 0.1 per cent in April, when harsh weather weighed on the GDP.
The May reading was two notches above the consensus expectation for a 0.3 per cent increase, according to economists polled by Bloomberg.
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Nineteen out of 20 sectors tracked by Statistics Canada recorded a pickup in economic activity. The oil and gas sector led the way with a 2.5 per cent increase. Consumer-based industries including retail and housing showed gains as well. The retail trade sector rose two per cent, its largest monthly increase since October 2017.
Although energy-sector disruptions like the production shutdowns in Alberta’s Syncrude plant are expected to weigh on the June GDP figures, the economy is on track for the strong second-quarter growth that the Bank of Canada expected, CIBC chief economist Avery Shenfeld noted shortly after the release.
“Barring bad news on the NAFTA or auto tariff front, the Bank of Canada will be raising rates in October, which is now our call,” Shenfeld noted.
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– With files from the Canadian Press