Canada's Economic Growth Stagnates in July, Expected to Rebound in August

Canada's economic growth stagnated in July, as expected, following three months of positive growth. The country's economy showed no change in July, according to Statistics Canada, which also indicated a likely rebound in August with a monthly growth rate of 0.2%. This expansion will primarily be driven by higher output in mining and quarrying and retail trade.

The good-producing sectors contribute roughly a quarter of the gross domestic product, and among them, the manufacturing sector decreased by 0.9% in July, posting its first decrease in four months. This was primarily led by a decline in activity at petroleum refineries which was down 6.2% in July.

The mining, quarrying and oil and gas extraction also posted a decline of 0.5%, down for the second month in a row. However, utilities and constructions sectors grew by 1.7% and 1.3% respectively, offsetting most of the decline. The construction sector rose for a fourth consecutive month.

The Bank of Canada has forecast an annualized growth of 1.5% in the third quarter, while money markets are pricing in a rate hike of 25 basis points in December, even as most economists have called for no change in interest rates all through the year.