Canada’s economy (real GDP) grew in October for the sixth consecutive month, up 0.4% following a 0.8% increase in September. Total economic activity is now just 4% below February’s pre-pandemic level. While below previous month’s growth rate, October’s GDP figure was above consensus estimates. The October figure is consistent with the economic picture that has emerged recently. The recovery is well under way and moving faster than most imagined but it has decelerated from the more rapid pace of recovery in the previous several months. If you are an optimist, the deceleration is temporary and has to do with the renewed closures announced as a result of the second wave of the virus. If you are a pessimist, the deceleration is evidence that the final phase of the recovery will be a tough slog. The truth is probably that both factors contributed to the deceleration of economic growth. The USD/CAD exchange rate did not react to the news and the Canadian dollar is up by 0.2%, in line with overall US weakness this morning. Equities and oil are broadly unchanged from yesterday’s close.
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