OTTAWA (Reuters) - The Canadian economy bounced back more strongly than expected in January from a weather-induced decline in December but failed to regain all the output that was lost in the final month of 2013, Statistics Canada said on Monday.
Gross domestic product (GDP) showed real, seasonally adjusted growth of 0.5 percent in January after December’s 0.5 percent decline. That was at the top end of a range of estimates in a Reuters survey of analysts. The median forecast was for 0.4 percent growth.
But in inflation-adjusted dollar terms, GDP was still a shade lower in January than it was in November.
“Markets will draw comfort from the confirmation that December’s dive was indeed a weather disruption rather than a sign of things to come,” said CIBC World Markets chief economist Avery Shenfeld.
The production of goods in January rose by 1.0 percent, led by bouncebacks in manufacturing, mining, construction, and oil and gas extraction. Services rose by 0.3 percent with gains in most sectors. January’s percentage gains in goods and services exactly mirrored December’s declines.
“The Canadian economy had a bit more energy than expected at the start of the year, managing to rebound nicely from the December ice storm as well as braving the unusual cold in January,” Bank of Montreal chief economist Doug Porter said.
“While no one would mistake growth for being robust, it does look sturdy enough to top the economy’s 2 percent potential growth rate this year. The uptick in wages is an added bonus for the outlook.”
A separate Statistics Canada report on payrollls on Monday showed weekly earnings rose 3.0 percent in January from a year earlier.
The survey also showed a loss of 7,000 jobs in the month. Statistics Canada’s much more timely but more volatile Labor Force Survey had reported a gain of 29,400 jobs in January, followed by a loss of 7,000 in February.
Editing by Chizu Nomiyama; and Peter Galloway