GDP per capita falls for sixth straight quarter, economists split on rate cut size
Friday's report said higher household and government spending was partly offset by slower inventory accumulation, lower business capital investment and lower exports. Economic growth remained weak in the month of September, with real GDP rising 0.1%. A preliminary estimate suggests the same pace of tepid growth in October as well.
Despite the slower growth, however, household net savings in the third quarter increased as disposable income grew at double the rate of spending.
The report says high wages and lower interest rates helped the household savings rate hit a three-year peak in the third quarter, reaching 7.1%.
By comparison, it was below three per cent at the end of 2019.
Bank of Canada governor Tiff Macklem announced a half-percentage point rate cut in October in response to inflation returning to the bank's two per cent target, but said the size of the next cut would be determined by incoming economic data.
Canada’s annual inflation rate bounced back up to two per cent in October after falling to 1.6% the previous month.