Canada’s economy shrinks on poor factory output

Bloomberg

Canada’s gross domestic product shrank unexpectedly in October as factories suffered their worst month in almost three years, adding to signs the country’s outlook is worsening.
Output fell 0.3%, Statistics Canada said in Ottawa. Economists surveyed by Bloomb-erg expected a flat reading, but widespread declines in goods-producing industries contributed to the largest monthly drop since May.
Manufacturing output was particularly disappointing, falling 2 percent in the biggest monthly decline since December 2013 and the second worst since the recession. The numbers are “pretty bad,” Benjamin Reitzes, senior economist at BMO Capital Markets, said by phone from Toronto. “Underlying growth is still sluggish.” Canada’s currency extended declines after the report, falling 0.5 percent to C$1.3552 against its US counterpart at 9:24 a.m. Toronto time.
The GDP numbers add to recent indicators showing low interest rates and a program of federal government stimulus are so far failing to spur a recovery. Inflation slowed to a 1.2 percent pace in November from a year earlier, the statistics agency said on Thursday, a softer reading than economists forecast, with one measure of core inflation slowing to the lowest level since 1996.