Rosenberg Research: Weak Canadian Data Cast Doubt on Further Rate Hikes

According to Jin10, David Rosenberg, head of Rosenberg Research, said weak economic data could test expectations of faster Canadian growth just days after the Bank of Canada raised its policy rate by 25 basis points. Data showed that Canadian nonfarm employment fell by 49,600 in August and GDP growth stalled that month, while GDP is expected to contract in September. This could leave third-quarter GDP growth at an annualized rate of just 1.3%, well below the Bank of Canada's previous forecast of 2%. Rosenberg questioned whether the central bank could ignore economic conditions and a recent run of weak data, and said its rate hike was based on “questionable survey data, rather than actual economic conditions.” He added that there is currently no evidence that higher fuel prices have passed through to prices for non-energy goods.