The Globe and Mail reports in its Friday, Sept. 30, edition that the Canadian economy is losing momentum, but so far is avoiding a contraction as output in July was better than expected. The Globe's Matt Lundy writes that real (inflation-adjusted) gross domestic product rose 0.1 per cent in July, stronger than a previous estimate of a 0.1-per-cent drop, Statistics Canada said in a report on Thursday. In a preliminary estimate, it said growth was essentially unchanged in August. Desjardins Securities macro strategy head Royce Mendes says, "The deceleration in economic momentum is why we see the Bank of Canada only hiking rates once more in October." The Globe says the Canadian economy is at a vulnerable point. CIBC Capital Markets senior economist Andrew Grantham concurs with Mr. Mendes, saying: "With inflation still high, policymakers are likely to press ahead with another rate hike next month. However, signs of consumer spending weakening even in some service industries, and job vacancy rates starting to come down from previously elevated levels, should see the [Bank of Canada] then take a pause to more fully assess how growth and inflation are responding to higher interest rates."
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