indicatorThe Owl

Economic growth stronger than expected in the third quarter

Despite the strong showing overall in the third quarter, there are signs that the economy is gearing down

By Rob Roach, ATB Economics 29 November 2022 1 min read

It feels wrong to be hoping for signs that the Canadian* economy is slowing, but the fight against high inflation requires just that.

In theory, the economic pain brought on by higher interest rates will impede growth and, in turn, help ease inflation. This takes time to happen, but we still want to see early indications that it is. If the economy does not cool off, the Bank of Canada will be under pressure to keep raising interest rates until it does

As of the third quarter of 2022, Canada’s economy was still growing at a pretty good clip.

Numbers released this morning by Statistics Canada indicate that Canada’s real GDP grew by 2.9% (annualized) in the third quarter. This is down slightly from 3.2% in the second quarter, but well above the 1.5% some analysts were expecting.

Despite the strong showing overall in the third quarter, there are signs that the economy is gearing down with most of the growth taking place in the first two months of the quarter and consumer spending falling for the first time since the second quarter of 2021.

How the Bank of Canada will react to this new information remains to be seen with the next announcement on interest rates coming on December 7.

*Provincial level GDP data are not available on a quarterly basis from Statistics Canada.

Answer to the previous trivia question: At just 29 hours, Australia is estimated to have the shortest average work week among employees.

Today’s trivia question: How many milk-producing farms are there in Alberta?

Alberta's inflation rate was 6.8% in October compared to 6.9% nationally

Annualized real GDP in Canada was $2.19 trillion as of the third quarter of 2022

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