Financial system positive factors momentum with 1.1% GDP development in February, finest month since March 2021

OTTAWA – The Canadian economic system surged forward in February as pandemic-related restrictions eased, fuelling expectations by economists that the Financial institution of Canada will go for one other outsized fee hike in June.

Statistics Canada mentioned Friday actual gross home product rose 1.1 per cent in February to submit its largest month-to-month achieve since March 2021.

The consequence was the ninth consecutive month-to-month achieve and topped the company’s preliminary estimate for the month that predicted a rise of 0.8 per cent for the month.

The company’s early estimate for March this yr indicated a achieve of 0.5 per cent for the month. The official determine is predicted Might 31.

“With all of the discuss of how excessive inflation and rising rates of interest will sluggish development, immediately’s GDP report reinforces the view that the momentum in Canada’s economic system is unrelenting,” TD Financial institution economist James Orlando wrote in a report.

“The Financial institution of Canada received’t want any extra convincing that one other 50 foundation level hike is required at its assembly on June 1.”

Statistics Canada’s places of work at Tunny’s Pasture in Ottawa

  • Statistics Canada's offices at Tunny's Pasture in Ottawa
  • Shoppers ride an escalator at Londonderry Mall in Edmonton on August 26, 2017. Statistics Canada says real gross domestic product rose 1.1 per cent in February to post its largest monthly gain since March 2021. The agency also says its early estimate for March this year indicated a gain of 0.5 per cent for the month.

The central financial institution raised its key rate of interest goal by half a proportion level for the primary time in additional than 20 years earlier this month to deliver it to at least one per cent and warned extra fee hikes are coming as it really works to assist deliver inflation underneath management.

Governor Tiff Macklem advised a Home of Commons committee this week that in waiting for its subsequent choices the financial institution “will probably be contemplating taking one other 50-basis-point step.”

RBC economist Claire Fan mentioned primarily based on the February studying and early estimate for March the economic system grew at an annualized fee of about 5.5 per cent within the first quarter.

“That’s larger than our present forecast of three.5 per cent and nicely above the 1.4 per cent annualized contraction in the identical quarter for US GDP, as reported earlier this week,” Fan wrote in a report.

“However capability points are rising to be extra urgent for each economies. Labour shortages are exceptionally acute, and that’s true even for shut contact sectors which have but to totally recuperate.”

Statistics Canada mentioned 16 of 20 industrial sectors grew in February with services-producing industries up 0.9 per cent whereas goods-producing industries added 1.5 per cent.

The lodging and meals companies sector soared 15.1 per cent in February as pandemic-related restrictions put in place in December and January have been eased.

Transportation and warehousing gained 3.1 per cent, whereas the humanities, leisure and recreation sector added 8.4 per cent for the month.

The development sector climbed 2.7 per cent larger in February.

This report by The Canadian Press was first revealed April 29, 2022.


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Source: Around the Globe

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