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Canada’s economy stalled in July amid weak sales and shipments
Early data points to flat July growth, and downside risk to a 1.8% annualized Q3 tracking estimate as trade tensions worsen.
Early industry data suggests Canada’s economy stalled in July, following stronger real GDP gains from April to June that averaged 0.4% per month, according to Action Forex.
The early readings show declines in shipments across July manufacturing, wholesale, and retail sales, while manufacturing GDP was likely near flat, with weakness concentrated in petroleum and auto. The update also said oil and gas output likely held steady as rising non conventional extraction in Alberta offset lower drilling.
The report added that housing rebounded in July, supporting a rise in real estate and rental services GDP, but momentum may have waned in August as trade tensions dampened buyer confidence.
Action Forex said a preliminary take on August GDP should clarify how the economy fared after trade talks with the United States collapsed and the U.S. imposed 50% tariffs on 5% of imports from Canada on Aug. 22, and it noted flat July real GDP poses downside risk to its Q3 tracking estimate of 1.8% annualized growth. It also pointed to other resilience signals, including hours worked up 0.6% in August and job openings holding relatively firm through mid September.