Trial now

Stronger In a Range


Weaker In A Range


Ending The Week On A Soft Note


Bearish Risk Growing


Stronger, But Still Vulnerable


SP500 PE Ratio vs. CPI Inflation

By Greg Quinn
     OTTAWA (MNI) - Canada's economic growth lagged expectations in 
the first quarter as weak foreign trade countered gains in 
consumer spending and business investment. 
     Gross domestic product grew at a 0.4% annualized pace, while 
analysts in a MNI survey had expected a 0.7% increase.  
Statistics Canada also lowered the fourth-quarter 2018 growth estimate 
to 0.3% from 0.4%.
     The report confirms the ``detour'' Bank of Canada officials said 
the economy took late last year, and the two quarters combined are the 
slowest growth since an oil crash in early 2015. Policy 
makers held their key rate at 1.75% Wednesday and said there's evidence 
the economy will gather speed later this year. Statistics Canada's 
report Friday showed the first quarter ended on a positive note with a 
March gain of 0.5%, the fastest since last May and ahead of forecasts of 
     The first quarter figures showed a divide between healthy 
domestic demand that boosted consumer spending by 3.5%, the fastest 
in almost two years. Business investment rebounded with a 3.6% rise, 
following three previous consecutive declines. Canadian spending on 
imports also rose 7.7%, a drag on growth.
     Exports were the other main source of weakness in the first 
quarter, with a 4.1% drop that was the fastest since the third 
quarter of 2017. Crude oil and farm products led the decline, in 
part because of transportation bottlenecks. 
     Another area the Bank of Canada is watching is business 
inventories, because they could be sign of products that are hard to 
sell. Inventories climbed C$17.7 billion in the first quarter, the most 
since the third quarter of 2017. 
     The March GDP gain included 16 of 20 industries tracked by 
Statistics Canada, including a 2.0% rise in oil and gas 
extraction that followed six previous consecutive declines. 
Energy production increased as the province of Alberta scaled 
back production cuts it mandated after prices tumbled.
     --MNI Ottawa Bureau; email: 
     [TOPICS: MACDS$,M$C$$$]