{"id":50688,"date":"2024-08-30T17:12:54","date_gmt":"2024-08-30T17:12:54","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2024\/08\/30\/bank-of-canada-may-make-bigger-cut-after-gdp-data\/"},"modified":"2024-08-30T17:12:54","modified_gmt":"2024-08-30T17:12:54","slug":"bank-of-canada-may-make-bigger-cut-after-gdp-data","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2024\/08\/30\/bank-of-canada-may-make-bigger-cut-after-gdp-data\/","title":{"rendered":"Bank of Canada may make bigger cut after GDP data"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header article-header--story\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<p>Breadcrumb Trail Links<\/p>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\">News<\/li>\n<li class=\"breadcrumbs__item\">Economy<\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\">Details in report hint at a stalling economy<\/p>\n<div class=\"article-meta\">\n<p><span class=\"published-date__since\">Published Aug 30, 2024<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">Last updated 2\u00a0hours ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">5 minute read<\/span><\/p>\n<div class=\"article-meta__bottom\">\n<div class=\"bookmark-wrapper\">\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-no-style=\"\" data-popover-component=\"\" data-position=\"top\" data-sticky=\"\" data-tail-offset=\"200\" data-tail-position=\"right\"><button class=\"popover__trigger bookmark-button\"><span class=\"save-article-button save-article-button--default\" title=\"Save article\" data-article-id=\"17b94c5c-79db-4eee-a4ff-b152c934cef9\" data-evt-skip-click=\"true\"\/><\/button><\/p>\n<div aria-describedby=\"popover-desc-popover-bookmark\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<div class=\"popover__content__text\" id=\"popover-desc-popover-bookmark\">\n<div class=\"bookmark__popover__content\">\n<p>You can save this article by registering for free here. Or sign-in if you have an account.<\/p>\n<\/div>\n<\/div>\n<p><button class=\"popover__content__close\" data-evt-skip-click=\"true\" title=\"Close\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" viewbox=\"0 0 12 12\" class=\"icon--close\" height=\"12\" version=\"1.1\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=564&amp;h=423&amp;type=webp&amp;sig=bqbohjh-kHLtKbuvBx4gmw,&#10;            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https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=webp&amp;sig=papZIOulwBYIIqGXlcHV_Q 2x\" type=\"image\/webp\"><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=472&amp;h=354&amp;type=jpg&amp;sig=KM42OvKO3V0fIwaK41y52A,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=jpg&amp;sig=Fb21XjXwriirOBW-ytbkBg 2x\" type=\"image\/jpeg\"><source media=\"(max-width: 767px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=288&amp;h=216&amp;type=webp&amp;sig=Q5X5H6oo-dTo7_UZuVwnjw,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/tiff-macklem-0829.jpg?quality=90&amp;strip=all&amp;w=576&amp;h=432&amp;type=webp&amp;sig=uWI4Gh1y3Gd3Fwoz80lSiQ 2x\" type=\"image\/webp\"><\/source><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Bank of Canada governor Tiff Macklem will announce the rate decision next week. <\/span> <span class=\"distributor\">The Canadian Press<\/span><\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Canada\u2019s gross domestic product for the second quarter came in stronger than expected, but the details of the GDP report and the accompanying outlook for the start of the next quarter hinted at a stalling economy, economists warned.<\/p>\n<p data-async=\"\">Statistics Canada said Friday second quarter GDP expanded at an annualized rate of 2.1 per cent, beating analyst forecasts for growth of 1.8 per cent and the Bank of Canada\u2018s projection of 1.5 per cent.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_2\">\n<section aria-describedby=\"advertisment2871871374861690660407171331653632\" class=\"ad\">\n<p>Advertisement 2<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<div class=\"article-block article-block-bg article-content__sign-in-group hidden\" data-aqa=\"identity-sign-in\" data-async=\"\" id=\"article-block\">\n<section class=\"row\">\n<header class=\"identity-intro col-xs-12 col-md-6 flex-justify-center\">\n<div class=\"col-xs-12 col-sm-10 col-md-10\"><img decoding=\"async\" alt=\"Financial Post\" class=\"market-logo\" height=\"37\" loading=\"lazy\" src=\"https:\/\/dcs-static.gprod.postmedia.digital\/17.0.2\/websites\/images\/identity\/logo-identity-fp.svg\" width=\"280\"\/><\/p>\n<div class=\"intro-body__premium hidden\">\n<p>THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY<\/p>\n<p class=\"identity-intro__description\">Subscribe now to read the latest news in your city and across Canada.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Exclusive articles from Barbara Shecter, Joe O&#8217;Connor, Gabriel Friedman, and others.<\/li>\n<li>Daily content from Financial 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data-sailthru-personalization-engine=\"\" data-sailthru-personalization-engine-component=\"\"\/>\n<div class=\"m-x-0 p-x-0 col-xs-12 col-sm-6 col-md-12 flex-align-justify-center\" data-auth-component=\"\" id=\"auth-screen-form\">\n<div class=\"identity-screen-form--active w-full flex-align-justify-center\">\n<div class=\"identity-screen-form identity-screen__content w-full\">\n<h2 class=\"blocker-title\">Sign In or Create an Account<\/h2>\n<p><span class=\"identity-divider__line\"\/><span class=\"identity-divider__text\">or<\/span><span class=\"identity-divider__line\"\/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<footer class=\"identity-footer identity-screen__content m-x-0 p-x-0 col-sm-6 col-md-12\"\/><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>While there were bright spots in the report including strong investment in machinery and equipment, for example, the data also showed that consumers are tired and government spending is playing an oversized role in growth.<\/p>\n<p>Here\u2019s what economists think the latest GDP numbers mean for the Bank of Canada and its next meeting on Sept. 4 when officials are expected to cut interest rates for the third consecutive time.<\/p>\n<h2>\u2018Weak momentum\u2019: CIBC<\/h2>\n<p>\u201cGrowth in the Canadian economy was modestly better than expected in Q2, but weak momentum heading into the third quarter gives ample reason for the BoC to continue cutting interest rates,\u201d Andrew Grantham, an economist at CIBC Economics, said in a note.<\/p>\n<p>June GDP came in unchanged from the month before and a Statistics Canada early estimate for July forecasts more of the same, Grantham said.<\/p>\n<p>If August and September track along these same lines, Grantham estimates that annualized GDP for the third quarter will come in at 0.5 per cent, well below the Bank of Canada\u2019s 2.8 per cent forecast in the latest Monetary Policy Report (MPR).<\/p>\n<p>There\u2019s nothing in the GDP numbers to\u00a0 prevent the Bank of Canada from continuing to cut rates, Grantham said.<\/p>\n<\/section>\n<div class=\"js-widget-content article-content__widget-group article-content__widget-group--content-slot20 article-content__widget-group--newsletter-slot\">\n<section class=\"newsletter-widget__new-story-page fp-headlinenews background--primary-light-gradient\" aria-labelledby=\"FinancialPostTopStories9487620294347453381522294996729856\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\">\n<div class=\"newsletter-new-story-page-template\">\n<div class=\"newsletter-widget__header__new-story-page\">\n<div class=\"newsletter-widget__banner__new-story-page\"><img decoding=\"async\" alt=\"Top Stories\" loading=\"lazy\" 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If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text__new-story-page newsletter__feedback--last\">The next issue of Top Stories will soon be in your inbox.<\/p>\n<\/div>\n<p class=\"newsletter-widget__text__new-story-page js-submit-error\" style=\"margin-top: 8px\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\">We encountered an issue signing you up. Please try again<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_3\">\n<section aria-describedby=\"advertisment5392979593998924394888419031908352\" class=\"ad\">\n<p>Advertisement 3<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>\u201cWe still see the Bank of Canada reducing interest rates by 25 basis points at each remaining meeting this year,\u201d he said.<\/p>\n<h2>\u2018Big disappointment\u2019: Capital Economics<\/h2>\n<p>While second-quarter GDP surprised to the upside, the data nonetheless opened the door to a 50 basis-point cut at the next Bank of Canada meeting, Stephen Brown, deputy chief North America economist at Capital Economics, said in a note.<\/p>\n<p>\u201cThe big disappointment was that monthly GDP in June was revised down to be unchanged from May, and the preliminary estimate for July points to another unchanged reading,\u201d Brown said.<\/p>\n<p data-async=\"\">The June and July numbers surprised the economist given that the Trans Mountain pipeline expansion started operating in early May, helping to increase energy volumes.<\/p>\n<p>Regardless of how August and September play out, growth for the third quarter will likely \u201ctrack\u201d below two per cent, missing the Bank of Canada\u2019s estimate for annualized GDP of 2.8 per cent.<\/p>\n<p>\u201cThe odds still just about favour a smaller 25 basis-point cut next week, but we wouldn\u2019t be surprised by a 50 basis-point move and there is now a good chance of a larger move at the October meeting, when the bank will update its economic forecasts,\u201d Brown said.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_4\">\n<section aria-describedby=\"advertisment4458476642217966402749945402621952\" class=\"ad\">\n<p>Advertisement 4<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<figure class=\"embedded-image\" data-aqa=\"embed-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=564&amp;type=webp&amp;sig=0R4rmU2tZiO0Rhr2rUiClg,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=1128&amp;type=webp&amp;sig=QcSwSqxsTnraFRXS8YZcoA 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=564&amp;type=jpg&amp;sig=Ch-Y_ir17a-HJ_zXu09rkQ,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=1128&amp;type=jpg&amp;sig=jE3h74rBEcuJr9Qv05dOJg 2x\" media=\"(min-width: 1200px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=472&amp;type=webp&amp;sig=K8EKN8uzk2C8KUkFRpgTQA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=944&amp;type=webp&amp;sig=C_29A0vBjVf8Haam8i21Xw 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/webp\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=472&amp;type=jpg&amp;sig=qbr94LvSKBZgvwSpe--m3g,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=944&amp;type=jpg&amp;sig=GRC0HArDTprKva_KbTVNDw 2x\" media=\"(min-width: 768px)\" srcset=\"data:,1w\" type=\"image\/jpeg\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=288&amp;type=webp&amp;sig=3csnYxuXeXPgbUYsfiMlPA,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=576&amp;type=webp&amp;sig=ehhYe6FnzEFrcuMUTNbMIg 2x\" media=\"(max-width: 767px)\" srcset=\"data:,1w\" type=\"image\/webp\"><img decoding=\"async\" alt=\"GDP chart\" class=\"embedded-image__image lazyload\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=288&amp;sig=ypxO9EJ3p_waOwr-T51gSw\" data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=288&amp;sig=ypxO9EJ3p_waOwr-T51gSw,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=90&amp;strip=all&amp;w=576&amp;sig=wCVcCKRrW_2TuU3eUQJsXQ 2x\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/july-gdp-2024.png?quality=5&amp;strip=all&amp;w=100&amp;sig=2qhbnaL4gP43D_2vAfY6kw\" height=\"822\" loading=\"lazy\" width=\"1000\"\/><\/source><\/source><\/source><\/source><\/source><\/picture><\/figure>\n<h2>\u2018Less impressive\u2019: Desjardins<\/h2>\n<p>\u201cMost of the gains also showed up early in the (second) quarter,\u201d said Royce Mendes, an economist with Desjardins Group.<\/p>\n<p>Much of the quarter\u2019s strength was attributed to growth in wages in the public sector, though business investment provided a boost as spending on aircraft and other transportation increased \u201csharply.\u201d<\/p>\n<p>But those aren\u2019t the sectors you want to depend on for economic growth, Mendes said.<\/p>\n<p>\u201cHigher government employee compensation isn\u2019t a sign of underlying strength in the economy and aircraft purchases tend to be lumpy, meaning that they can\u2019t be counted on to continue at that pace,\u201d he said. \u201cAs a result, the Q2 GDP beat is less impressive than the headline might indicate.\u201d<\/p>\n<p>Looking ahead, Mendes estimated that the third quarter could grow at one per cent to 1.5 per cent annualized \u2014 \u201croughly half the pace that the Bank of Canada had forecast in its July MPR.\u201d<\/p>\n<p>The \u201cheadline beat\u201d in the second quarter is not a game-changer for the Bank of Canada.<\/p>\n<p>Given the underlying weakness in the report, Mendes also thinks a bigger rate cut is now on the table.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_5\">\n<section aria-describedby=\"advertisment3642143268366500670428160532152320\" class=\"ad\">\n<p>Advertisement 5<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>\u201cWhile our base case still sees 25 basis-points rate cuts being the norm, the risks surrounding that forecast are now clearly tilted towards something larger,\u201d he said.<\/p>\n<h2>\u2018Softening backdrop\u2019: Royal Bank of Canada<\/h2>\n<p>\u201cBy our count a surge in government spending accounted for 80 per cent of the Q2 GDP increase,\u201d Abbey Xu, an economist at Royal Bank of Canada, said in a note, adding that on a per-capita basis, GDP is down for a fifth consecutive quarter.<\/p>\n<p>In her note, Xu highlighted that spending on goods declined by one per cent in the second quarter. Services spending increased, but growth slowed by more than half from the first quarter, she said.<\/p>\n<p>\u201cThe monthly data is reinforcing a loss of growth momentum towards the end of Q2,\u201d Xu said, noting that growth in May was revised down to 0.1 per cent from 0.2 per cent, while June growth was flat.<\/p>\n<p>Slowing inflation and rising unemployment reinforce a \u201csoftening economic backdrop,\u201d the economist said, adding that RBC expects the Bank of Canada to cut again by 25 basis points in September.<\/p>\n<h2>\u2018Cautious\u2019 households: Alberta Central<\/h2>\n<p>Without government spending, second-quarter GDP would have come in at 0.7 per cent annualized instead of 2.1 per cent, said Charles St-Arnaud, chief economist at credit union Alberta Central.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_6\">\n<section aria-describedby=\"advertisment5118136481453417798907584592216064\" class=\"ad\">\n<p>Advertisement 6<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-6\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"6\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-6\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>Besides government coffers, St-Arnaud said \u201cpopulation growth remains a significant source of growth\u201d although on a per-capita basis, consumer spending declined 0.4 per cent quarter over quarter.<\/p>\n<section aria-labelledby=\"moreTopicLabel5937074432396768928479039797067776\" class=\"more-topic\" data-aqa=\"embed-more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\">\n<p>Recommended from Editorial<\/p>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/><\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li data-evt-val=\"{\" control_fields=\"\" beats=\"\" bank=\"\" of=\"\" canada=\"\" forecast=\"\" with=\"\" growth=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"Commercial trucks and passenger vehicles drive across Ambassador Bridge on the Canada-U.S. border in Windsor, Ont. Canada's economy grew at an annualized rate of 2.1 per cent in the second quarter.&#10;\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/gdp-canada-0830-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=4WYXPvtjUh5_p7I3c0NQxA\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/gdp-canada-0830-ph.jpg?h=96&amp;strip=all&amp;quality=5&amp;sig=vEhVgoz960ikSqWi4bH6Yw\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/gdp-canada-0830-ph.jpg?h=96&amp;strip=all&amp;quality=80&amp;sig=4WYXPvtjUh5_p7I3c0NQxA, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/gdp-canada-0830-ph.jpg?h=192&amp;strip=all&amp;quality=80&amp;sig=4fNroQOeovBbf9Rlgw-YZQ 2x,&#10;                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/08\/gdp-canada-0830-ph.jpg?h=288&amp;strip=all&amp;quality=80&amp;sig=JhshYMOHD2A1gUL-382G_w 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">Economy beats Bank of Canada forecast with 2.1% growth<\/span><\/p>\n<\/li>\n<li data-evt-val=\"{\" control_fields=\"\" of=\"\" canada=\"\" to=\"\" cut=\"\" rates=\"\" deeper=\"\" faster=\"\" economists=\"\" say=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/08\/Powell-Macklem-gs0826.png?h=96&amp;strip=all&amp;quality=80&amp;sig=hLICvtKJUpjvX6DuehqvNg\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/08\/Powell-Macklem-gs0826.png?h=96&amp;strip=all&amp;quality=80&amp;sig=hLICvtKJUpjvX6DuehqvNg, https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/08\/Powell-Macklem-gs0826.png?h=192&amp;strip=all&amp;quality=80&amp;sig=hQ3VMvd0WrhbP5sNn7cV4A 2x,&#10;                                             https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/08\/Powell-Macklem-gs0826.png?h=288&amp;strip=all&amp;quality=80&amp;sig=PjWh35mu6fPHrqoEPnaPig 3x\" alt=\"None\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">Bank of Canada to cut rates deeper, faster, economists say<\/span><\/p>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/><\/section>\n<p>There were many signs in the report that consumers are wary.<\/p>\n<p>For example, St-Arnaud estimates that consumer spending contributed a meagre 0.3 percentage points to growth in the second quarter. Further, the savings rate rose to 7.2 per cent \u2014 the highest since 1996 outside the pandemic \u2014 \u201csuggesting that households continue to be cautious with their spending and higher interest rates are making saving more attractive.\u201d<\/p>\n<p>St-Arnaud said the overall weak report and outlook for the third quarter will reinforce the Bank of Canada\u2019s intention to cut in September. He expects the central bank will also cut in October and December \u201cbringing the policy rate to 3.75 per cent.\u201d<\/p>\n<p data-async=\"\"><em>\u2022 Email: gmvsuhanic@postmedia.com<\/em><\/p>\n<p data-async=\"\"><em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em><\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt-val=\"{\" control_fields=\"\" data-evt-typ=\"page_scroll\">\n<p>Share this article in your social network<\/p>\n<\/section>\n<\/div>\n\n<br \/>Bank of Canada may make bigger cut after GDP data<\/a><br \/>\n<br \/>2024-08-30 17:12:54<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News Economy Details in report hint at a stalling economy Published Aug 30, 2024 \u00a0\u2022\u00a0 Last updated 2\u00a0hours ago \u00a0\u2022\u00a0 5 minute read You can save this&#8230;<\/p>\n","protected":false},"author":2,"featured_media":50689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-50688","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/50688","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=50688"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/50688\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/50689"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=50688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=50688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=50688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}