Oil, gas extraction help boost Canada's economy in November

Fri Jan 29, 2016 10:10am EST
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By Leah Schnurr

OTTAWA (Reuters) - Canadian economic growth edged up in November on an increase in oil and gas extraction, as well as greater wholesale and retail trade but the modest improvement still pointed to a fourth quarter that was likely weak at best.

Gross domestic product rose 0.3 percent for the month, matching economists' expectations, Statistics Canada said on Friday.

The growth for November comes on the heels of a flat October and a decline in September. While economists said November's rebound was encouraging, it did not change expectations that growth likely stalled again in the final quarter of the year shortly after oil-exporting Canada emerged from a mild recession

Andrew Kelvin, senior rates strategist at TD Securities, said Friday's figure likely puts quarterly growth around zero, which is what the Bank of Canada recently forecast.

For the Bank of Canada, "it doesn't change anything there," Kelvin said.

The central bank held rates earlier this month amid concern about the falling Canadian dollar. A recent poll showed most economists expect the bank to stand pat until 2017, but a minority anticipate another cut this year.

The Canadian dollar firmed against the greenback following the data but it was also boosted by an increase in oil prices and a slower U.S. economy in the fourth quarter.

Oil and gas extraction jumped 2.1 percent in November, rebounding from a slump in September and little growth in October following production problems and maintenance shutdowns.   Continued...

Jul 9, 2015; Toronto, Ontario, Canada; A general of a Canadian flag on Princes' Boulevard with the CN Tower in the background in preparation for the 2015 Pan Am Games. Mandatory Credit: Rob Schumacher-USA TODAY Sports