Canada's Economy Grows 2.1% in Q2

Canada's economy grew at an annualized rate of 2.1% in the second quarter of 2024, surpassing expectations from both analysts and the Bank of Canada, which had forecasted growth of 1.5% to 1.6%. This growth was primarily driven by increased government spending, business investments, and household expenditures on services. However, GDP per capita continued to decline for the fifth consecutive quarter, indicating that the growth is not being felt equally among the population. Despite the positive quarterly growth, preliminary data suggests that the economy remained flat in July, leading to expectations of further interest rate cuts by the Bank of Canada. The unemployment rate has also been rising, reaching 6.4% in July, which adds pressure for a policy rate reduction. Overall, while the growth figures are encouraging, underlying economic weaknesses persist.