Completely rewrite the following article in a fresh and original style. Ensure the new content conveys the same sentiment and message as the original. The rewritten article should:
- Start with a compelling introduction that hooks the reader (do not label this section).
- Maintain any lists and points as they are, using numbering and bullet points where necessary. Rewrite the explanations and discussions around these points to make them fresh and original. Ensure the lists are formatted correctly with proper numbering or bullet points.
- Organize the content into clear, logical sections. Subheadings are not mandatory. Each section should have a subheading only if it enhances readability and comprehension.
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End with a strong conclusion that summarizes the key points and provides a closing thought or call to action (do not label this section).
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Ensure it is formatted properly with adequate line spacing
Make sure the article flows coherently, is engaging, and keeps the reader interested until the end. Reorganize and structure the content efficiently to enhance readability and comprehension. Use varied sentence structures and vocabulary to avoid monotony. Avoid directly copying any sentences or phrases from the original content. Here is the original content:
Canada’s economy might be stronger than expected according to this week’s data. Statistics Canada (Stat Can) data shows real gross domestic product (GDP) grew in April. Even with preliminary numbers showing growth stalling in May, output is still set to outperform the central bank’s expectations. Most weakness is contained to just a few sectors, including housing—which is providing a drag despite increased state-stimulus.
Canadian Real GDP Rises In April, Higher Growth Than BoC Expects
Canadian economic output made a big advance in the latest report. Real GDP climbed 0.3% in April, matching the preliminary estimate a month prior. May’s preliminary data wasn’t quite as robust at 0.1%, but even just that would be enough to best the central bank’s estimate for growth.
Source: Stat Can.
“The two months combined put Q2 on track for nearly 2% annualized growth, which is a bit stronger than the BoC’s (and our) 1.5% call for the quarter, but we’ll await further data before adjusting our forecast,” wrote Douglas Porter, Chief economist at BMO.
His calculations show real growth for 2024 is so far on track for 1% annual growth. “That’s not a recession by any means, but it’s also pretty soft, especially in light of 3%+ population growth,” he explained.
Canadian GDP Held Back Housing, Which Has Dropped 24%
The weakness in the latest numbers was almost entirely attributed to the slowdown in housing. The agency notes construction fell 0.4% in April, with residential building construction responsible for the collapse. The U.S. component fell 2.3% in the month, and is 24% lower than it was at the peak hit in April 2024. Policymakers pumping tens of billions in capital to stimulate residential construction has had the opposite of the desired effect—propping up prices and preserving the cost inefficiencies.
On the upside, more than three-quarters of components in GDP saw growth in the latest report. A rebound for resources, which saw the Mining, Quarrying, and Oil & Gas Extraction (+1.8%), was a particularly big contributor.
Canada’s economic picture is blurry these days, especially to those looking for insight on when the next rate cut is coming. Higher-than-expected real GDP growth follows an acceleration in headline and Core CPI, showing demand is far from dead.
Unemployment is rising, but that’s not due to the country adding fewer jobs—Canada has seen employment grow at a fairly robust rate over the past few years. The issue is the population’s rapid expansion has resulted in workers growing at 3x the rate jobs are added.
None of these are factors that would pressure interest rates lower.
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