Canada: Real GDP beats the heat in July

Real GDP advanced by 0.1% in July, beating market and Statistics Canada’s expectations of a 0.1% decline. Goods-producing sectors led the advance with a 0.5% gain in the month. Services-producing sectors posted their first monthly retreat since January, down -0.1% in July. Statistics Canada’s flash estimate is for real GDP to be little changed in August, pointing to a rebound in retail and wholesale trade offset by declines in manufacturing and oil and gas extraction. Today’s upside surprise in July real GDP growth helped to solidify our tracking for Q3 real GDP growth at around 1% annualized. This firms up our view that the Bank of Canada will hike by an additional 50 bps at its October meeting.