Behind the Headlines: July, 2007

Article Excerpt

The Canadian economy stagnated in April, after growing 0.3% in March and 0.4% in February. The flat month followed strong annualized growth of 3.7% in the first quarter of 2007. Consensus forecasts called for growth of 0.3% in April. The Canadian dollar had reached a new 30-year high before the release of the April growth figure, rising to 0.9551 U.S. It last reached that level in May, 1977. Our dollar fell to $0.9386 after the April report. Despite zero expansion in April, the outlook for the Canadian economy remains sound. That’s because the lack of growth was largely due to significant drops in specific industries, rather than an across-the-board decline. Wholesale trade, oil and gas exploration, and motor vehicle manufacturing registered big drops. But excluding those drops, the Canadian economy actually expanded by a healthy monthly rate of 0.3% in April. Expanding segments of the economy in April included construction, which recorded its 25th consecutive month of increases by gaining 0.3%; utilities (electric, gas and…