Third quarter 2017 GDP data from StatsCan

  • Prior was +4.5% q/q annualized (revised to +4.3%)
  • September GDP +0.2% m/m vs +0.1% expected
  • August GDP was -0.1%
  • GDP +3.3% y/y vs +3.3% expected

The headline was a bit strong but it's mitigated by the softer revision. On net, it's very close to estimates, as the +3.3% y/y reading shows.

Details:

  • Household consumption increased at a +4% annualized pace compared to less than 3% expected. Q2 was also revised higher to 5%

This will be seen as hawkish by the Bank of Canada because it shows that interest rate hikes didn't bite the consumer as much as feared. However, more real-time data, like the latest retail sales report released last week, was very weak so they will still have questions.

  • Exports -10.2% annualized
  • Exports dragged grow 3.4 percentage points lower
  • Compensation +1.3% nominally (nearly 5% annualized)
  • Government investment added 0.5 pp to growth
  • Inventories added 1.0 pp to growth
  • Business investment +3.7% annualized
  • Residential investment -1.4% annualized