Canada's Economy Hits a Speed Bump in July

The Canadian economy experienced stalled growth in July, according to Statistics Canada. The real gross domestic product was essentially unchanged that month. Strength in construction and utilities was offset by declines elsewhere in the economy.

TD Bank economist Marc Ercolao said this stagnation is not alarming. He attributed some of the decline in manufacturing and mining to one-off factors like production disruptions.

Ercolao noted that the July growth slowdown is part of the 'broader volatility' seen in Canadian economic growth since last year. The economy has settled into a 'sawtooth' pattern, with growth accelerating and then slowing down.

Despite the decline, construction sector saw its fourth consecutive month of growth, up 1.3 per cent in July. Utilities also experienced strong growth due to increased electricity generation and transmission.

The Bank of Canada will be keeping a close eye on upcoming data releases before making its next interest rate announcement. Deputy Governor Toni Gravelle noted that the central bank is facing a 'true dilemma' in balancing energy price shocks against the ongoing trade dispute.