Canada's GDP Growth Moderates in July but Remains Resilient

The Canadian economy's growth has moderated in July after three strong months, according to Statistics Canada. Both goods and services output were flat in July, which may indicate a slowdown in the country's economic rebound.

However, a preliminary estimate suggests that GDP increased by 0.2% in August. Assuming no growth in September, this would put quarterly GDP growth at 2.0% annualized, representing a solid advance.

This development may ease some concerns about the Bank of Canada's ability to withstand trade tensions, which have intensified recently. The Bank has been patient so far, but its patience could be tested in the fourth quarter if the conflict persists and higher energy costs spill over into underlying inflation.