Canada's Economic Growth Falters Amid Trade Tensions

Canada's economic growth stalled in July, following stronger monthly gains in real gross domestic product from April to June that averaged 0.4%. Industry data shows declines in manufacturing, wholesale and retail sales, although manufacturing GDP was near flat as weakness was concentrated in petroleum and auto sectors.

Oil and gas output likely held steady as rising non-conventional extraction in Alberta offset lower drilling. Housing rebounded in July, supporting another increase in real estate and rental services GDP, though momentum may have waned in August due to rising trade tensions dampening buyer confidence.

The economy is still on track for more recovery in Q3, but flat real GDP in July poses a downside risk to the estimated 1.8% annualized growth. Consumer resilience remains strong, with hours worked continuing to rise strongly and job openings holding firm through mid-September.