‘Robust’ GDP growth to start 2024 puts Bank of Canada in tough spot: economists

globalnews.ca:

The Canadian economy is outperforming expectations to start 2024, Statistics Canada data shows.

The agency said Thursday that real gross domestic product in the first month of the year rose 0.6 per cent from December, beating most economists expectations.

The ends and beginnings of some labour disruptions were creating a few one-time impacts on the economy in January, Statistics Canada said.

StatCan pointed to a rebound in education services, tied largely to the end of public sector strikes in Quebec, as driving the growth in January. The beginning of a strike by the Saskatchewan Teachers’ Federation in the month hindered growth to a degree, StatCan added.

The agency also said that an end to the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) strike in November meant that film and TV production in Toronto and Vancouver picked back up in January, driving growth in this sector.

Canada’s real estate, rental and leasing sector meanwhile grew for the third consecutive month. Higher sales in Ontario’s Golden Horseshoe area were responsible for the gains, StatCan said.

The manufacturing industry in January also fully offset declines seen in December, StatCan said. Output from the automotive sector snapped a four-month streak of declines as production resumed at some auto assembly plants at the start of the year.

Oil and gas extraction was down in January, tempering gains for the overall economy.

Initial estimates show real GDP is expected to have kept growing at a clip of 0.4 per cent monthly in February, though StatCan cautions that those early readings can be revised.

With signs of a strong start to the year, real GDP is tracking for an annualized gain of 3.5 per cent in the first