Canada’s economy was stable in May, fueling fears that a slowdown is already underway

Canada’s economy did not grow at all in May, the second month of the year it failed to make gains, Statistics Canada said Friday.

The data agency said a slight rise in the services sector was not enough to offset a decline in goods-producing industries, so the total value of all economic output during the month remained essentially unchanged from a month earlier.

The stagnation was actually better than the slight 0.2% decline economists were expecting.

An advanced estimate for June suggests the economy did only marginally better last month as well, rising 0.1%.

Final figures won’t be available until the end of August, but if the June figure is confirmed, it means that the Canadian economy grew by 1.1% in the second quarter – which is not not a good performance, but at least better than contraction. 0.9% observed in the United States during the same period.

“Today’s GDP data suggests the Canadian economy was slowing even before the Bank of Canada’s largest rate hike was made,” said CIBC economist Andrew Grantham.

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