After a stellar start to the year, Canada’s economy and ETF have seen growth cool, but make no mistake, it’s still happening, even as economic reports go mixed.
- The Bank of Canada stated that growth will slow to a 3.8% annualized pace in the April-to-June period after experiencing growth of 6.1% in the first quarter, reports Greg Quinn for BusinessWeek. Earlier in the year, consumer spending was aided by temporary tax measures that are now expired. Additionally, mortgage rates increased in March and April.
- The June RBC Consumer Outlook Index shows that 67% – up from 54% in the last quarter – of Canadians believe in a positive outlook for the economy, and the Index revealed that 20% were anxious about their jobs, according to CTV News. Some 67% of Canadians also say rising interest rates are their biggest concern, with 84% expecting rising rates in the next six months.
- Statistics Canada has announced that inflation slowed to 1.4% in May year-over-year, and said employment growth dropped to 24,700 for May from a record 108,700 spike in April.
- Tepid economic reports lower the probability that the Bank of Canada would increase rates at its next meet since growth hasn’t reached the required average of 0.5%.
- Retail sales diminished by 1.7% in April, falling on reduced sales at new car dealers and clothing stores. Manufacturing dropped 0.3%. Production of non-durable goods declined 1.2% as a result of poor numbers in pharmaceuticals, printing and food. However, oil and gas extraction rose 0.5% and wholesale trade increased by 0.6%. Overall, the GDP expanded by 3.3% since April 2009.
- iShares MSCI Canada (EWC)
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Max Chen contributed to this article.