The Canadian economy remained at a standstill in February, slightly better than the consensus expectation of -0.1%. The January growth figure revised down modestly in this morning's report, while December growth was revised up, providing a better hand-off for the first quarter.
Today's GDP report confirms that Canada started 2015 on a sour note, although perhaps not as sour a note as some feared. The composition of growth suggests that the result of oil price shocks have not yet become widespread, as the non-commodity, non-manufacturing side of the Canadian economy managed to eke out growth in February.
From the Bank of Canada's perspective, although February's growth performance was feeble, it is difficult to characterize as 'atrocious'. Should the commodity price shock prove to be concentrated in the first quarter, as the Bank expects, today's report would hardly be cause for alarm.
"We continue to view the current monetary policy rate as sufficiently accommodative, and as such expect that the Bank of Canada will maintain the rate at 0.75% through the remainder of the year and into 2016, before beginning a tightening cycle late next year." says TD Economics in a report
