Canada Economy Rises 0.1% in May

Canada’s gross domestic product expanded in May after stalling the month before, with mining and oil leading increased goods production, while wholesale and real estate activity declined., Bloomberg 8/2/2010 4:08:50 AM

Canada’s economic output rose 0.1 percent to a seasonally adjusted annual rate of C$1.23 trillion ($1.19 trillion) in May, Statistics Canada said.

Canada’s annual growth rate probably slowed to 3 percent in the second quarter from a decade-high pace of 6.1 percent between January and March, when low mortgage rates and temporary tax credits sparked spending, the Bank of Canada said July 22. The economy’s growth of 3.5 percent this year will still lead the U.S., the euro zone and Japan on consumer and government spending, the bank said.

Mining, oil and gas grew 3.4 percent in May from April, leading a 0.6 percent gain in goods-producing industries, Statistics Canada said. Retailing grew 0.3 percent, led by clothing, food and beverages, the government agency said, and manufacturing increased 0.1 percent.

Canada’s job creation was almost five times more than economists expected in June, restoring most of the country’s job losses since 2008, Statistics Canada said July 9. Employment rose by 93,200 in June, following gains of 24,700 in May and April’s record 108,700.

Today, Statistics Canada also reported that average weekly earnings of payroll employees increased by 3.7 percent in May from a year earlier, the fastest since February 2008. Earnings rose 0.4 percent in May from April, as non-farm payrolls fell by 25,000, or by 0.2 percent. Payrolls increased 0.4 percent from the year-earlier month.

The Bank of Canada raised its key rate for a second month on July 20 and said further moves must be weighed carefully” against the recovery. The bank also said the global economic recovery is proceeding but is not yet self-sustaining.”

Gross domestic product gained 3.8 percent from May 2009, today’s report said.

Canada has raised rates as its biggest trade partner, the U.S., reported this week that consumers lost confidence in July, shaken by mounting concern over jobs and wages.

Canada’s housing market also showed signs of slowing in today’s GDP report as the central bank has predicted. The output of real estate agents and brokers dropped 11 percent in May, the fifth straight decline. Residential construction fell 3.8 percent, leading a 1.6 percent decrease in construction.

Service industries fell 0.l percent in May, the statistics agency said.

Canada Economy Rises 0.1% in May