Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Final hours: unlock premium data with Claim 60% OFF
Canadian economy seen strengthening, but analysts wary of Omicron impact
Published Nov 30, 2021 08:43AM ET
Updated Nov 30, 2021 10:05AM ET
© Reuters. FILE PHOTO: A construction crane is seen above Brookfield's Bay Adelaide North, the third office tower to be constructed at their Bay Adelaide Centre complex property in Toronto, Ontario, Canada April 14, 2021. REUTERS/Chris Helgren/File Photo
By Julie Gordon
OTTAWA (Reuters) -The Canadian economy roared back in the third quarter, with growth most likely accelerating in October on a manufacturing rebound, though economists were cautious on the looming impact of the Omicron COVID-19 variant.
Canada's economy grew 5.4% in the third quarter on an annualized basis, beating analyst expectations for a gain of 3.0%, Statistics Canada data showed. A preliminary estimate for October showed a gain of 0.8%, while September's GDP was in line with expectations for a 0.1% rise.
Statscan revised down annualized second-quarter GDP to a contraction of 3.2% from a previous dip of 1.1%. But with the October gain, economic activity is now just 0.5% below pre-pandemic levels.
"The October increase was maybe more encouraging for the speed of recovery even than the third quarter numbers," said Nathan Janzen, senior economist at Royal Bank of Canada.
"There is a lot of uncertainty right now about how long this can be sustained just given ... the Omicron variant."
The third-quarter rebound was driven by one of the largest household spending sprees on record, as COVID-19 restrictions were eased and consumers bought everything from clothing to personal grooming services. Exports were also up, led by crude oil.
"We had a pretty strong showing in consumer spending. So that was nice to see after the weakness we had in the second quarter," said Jimmy Jean, chief economist at Desjardins Group.
"But now the question is what's going to happen in fourth quarter," he added, pointing to both the emergence of the Omicron variant and flooding in the western province of British Columbia that cut off a key port from the rest of Canada. "It seems the more we go into the quarter the risk has tilted to the downside."
Canada has reported five cases of the Omicron variant. The health minister in the province of Quebec warned residents to rethink holiday travel.
The Bank of Canada last month signaled it could start hiking rates as soon as April 2022, with inflation set to stay above target through much of next year due to supply chain bottlenecks and high energy prices.
The Canadian dollar was trading 0.2% lower at 1.2768 to the greenback, or 78.32 U.S. cents. Investors are pricing in a first rate hike in either March or April. [BOCWATCH]
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.