- Q2 was +3.3% (vs +4.4% expected)
- GDP +0.7% q/q vs +0.8% prior
- Implicit price change -1.4% q/q vs +3.3% prior
- GDP m/m +0.1% vs +0.1% expected
- Prior m/m reading 0.1%
- October advance GDP unchanged
- Inventories +46.8B vs +$47.0B prior
- Nominal GDP -0.7% vs +4.0% q/q prior
- Compensation for employees +1.2% vs +2.0% q/q prior
- Final Q3 domestic demand -0.2% vs +0.6% prior
- Household spending -0.3%
- Full report
This is the fifth consecutive quarterly increase for Canada and a surprise. Growth in exports, non-residential structures, and business investment in inventories were moderated by declines in housing investment and household spending. Inventories are the kicker as they grew at near-record pace with StatsCan citing manufacturing inventories in particularly. Optimistically, that might be rebuilding inventories but it bears close watching with global growth slowing.
The BOC will take some solace in slowing wage growth and they will feel good about slowing the pace of hikes. The market is 74% priced for 25 bps on Dec 7 with the remainder at 50 bps.
CAD is near the lows of the day but I wouldn't attribute that to this report.