Economy posts another weak quarter of growth, but shows signs of rebound

The Canadian economy posted grow of just 0.4 per cent annualized in the first three months of the year marking the country's weakest back-to-back quarters of growth since 2015

The Canadian economy posted grow of just 0.4 per cent annualized in the first three months of the year marking the country's weakest back-to-back quarters of growth since 2015

Gross domestic product in March grew by 0.5% from February - the largest increase since the 0.5% gain seen in May 2018 - on widespread improvement across both the goods- and service-producing sectors.

The first-quarter data were slightly higher than the prediction of the Bank of Canada, which has stressed the slowdown was temporary and that growth has been accelerating in the second quarter.

The winter deep freeze in the Canadian economy is showing signs of thawing, as an upbeat March sent the strongest signal yet that the country is rebounding from its two-quarter stall.

Canada's economy had its weakest back-to-back growth in four years. The Canadian Press cited a report from that Statistics Canada that says the economy expanded less than half a percent over the most recent quarter. The biggest declines in exports were in farm and fishing products along with crude-oil shipments.

Household spending was up an annualized 3.5 per cent in the quarter, after growing at the slowest pace in nearly four years at the end of last year.

Meanwhile, the first quarter showed encouraging strength in household consumption, which rose 3.5 per cent annualized, and in business spending on machinery, equipment and structures, which surged 13.5 per cent after a discouraging two-quarter slump. But even here, trade data reported earlier this month suggested March was much better for exporters - boding well for the second quarter.

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"We know the economy went through a soft patch at the end of 2018 and the beginning of 2019".

On Thursday, Bank of Canada senior deputy governor Carolyn Wilkins said external trade risks are a "major preoccupation". It also underlines the risks in the deeply uncertain worldwide trade environment, which threaten to weigh on export-heavy economies such as Canada's.

At the very least, the numbers suggest that heightened uncertainty - everything from the impact of higher interest rates to potential trade wars and oil-sector woes - has begun to fade.

But bigger, widening concerns around global trade - including U.S. President Donald Trump's new threat to impose tariffs on all Mexican imports - could derail Canada's domestic progress.

The central bank is also monitoring the possibility of a trade feud between the US and the European Union. It has predicted 1.3 per cent growth in the second quarter and for expansion to pick up its pace throughout the rest of the year.

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