HomeMortgageEconomists see underlying signs of weakening in third quarter GDP numbers

Economists see underlying signs of weakening in third quarter GDP numbers

OTTAWA — Canada saw stronger than expected economic growth in the third quarter, but economists warn the underlying numbers don’t paint such a positive picture.

Statistics Canada said Tuesday the economy grew at an annualized rate of 2.9 per cent between July and September.

That compares with 3.2 per cent growth in the second quarter.

Although the headline growth rate is significantly stronger than forecasters had anticipated, the fall in consumer spending suggests higher interest rates are beginning to affect the economy more broadly.

“Sometimes the headline numbers look one way and the rest is quite a bit different,” said Karyne Charbonneau, CIBC’s director of economics.

Household spending fell for the first time since the second quarter of 2021, edging down 0.3 per cent.

Charbonneau said higher interest rates force consumers to pull back on spending as mortgage costs rise. At the same…

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