Canada's economy grew 1% in the third quarter from higher ...

Jenna Benchetrit · CBC News

· Posted: Nov 29, 2024 8:36 AM EST | Last Updated: November 29

The Canadian economy grew at an annualized rate of one per cent in the third quarter, boosted by higher household and government spending, Statistics Canada said on Friday.

The rate was in line with economists' expectations but below the Bank of Canada's quarterly projection of 1.5 per cent.

The growth was offset by lower business investment — specifically due to less spending on machinery, including aircrafts — and lower exports, which declined more than imports, according to the data agency.

Household spending rose as people spent money on new trucks, vans and sports vehicles, as well as financial services. There was a pullback in spending on food services and accommodation.

Government spending rose for the third consecutive quarter.

GDP per capita fell 0.4 per cent in the third quarter, the sixth consecutive quarterly decline.

Statistics Canada also revised its second-quarter annualized growth to 2.2 per cent from 2.1 per cent.

The GDP data, as well as a jobs report due early next month, will help the Bank of Canada determine the size of an expected rate cut at its last interest rate decision of the year on Dec. 11.

The employment report will be the last major economic data before the bank's monetary policy decision.

"Despite the positive historic revisions and better underlying detail within the Q3 data, today's GDP figures point to a weaker recent trend in activity than the Bank of Canada was expecting," said Andrew Grantham, chief economist at CIBC Capital Markets.

The numbers are "supportive of a 50 [basis-point] cut at the December meeting, although next week's employment figures are still likely more important in making a final determination."