The Globe and Mail reports in its Wednesday edition that Canadian factory sales and wholesale trade slumped more than expected in November, supporting the Bank of Canada's gloomy short-term forecasts for the economy, which have sidelined prospects of more interest rate hikes over the coming months.
A Reuters dispatch to The Globe reports that the BOC has said low oil prices and a weak housing market will harm the economy in the fourth quarter of 2018, and the first quarter of this year.
The price of oil plunged as much as 45 per cent between October and December before paring some of its decline of late.
Action Economics economist Ryan Brecht says, "Manufacturing and wholesales confirm the well-anticipated oil hit to Canada's economy in Q4." Mr. Brecht expects GDP to decline 0.1 per cent in November and for fourth quarter growth to slow to 1.2 per cent annualized, slightly less than the 1.3 per cent that the BOC has forecast.
Canadian factory sales were down 1.4 per cent in November from October on lower petroleum and coal product sales, Statistics Canada said. Analysts had forecast a decrease of 0.9 per cent.
TD economist Omar Abdelrahman says, "The release confirms the moderating growth narrative."
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