OTTAWA
Canada's economy stalled for a second month in a row in August and early estimates suggest it contracted in September, Statistics Canada said Friday.
Real gross domestic product was essentially unchanged in August, falling short of economists' forecasts for 0.2 percent growth.
The agency's early estimate for September suggests real GDP declined 0.1 percent, driven by losses in manufacturing and mining, quarrying and oil and gas extraction.
"StatCan said real gross domestic product was essentially unchanged in August, falling short of economists’ calls and the agency’s own early expectations for a gain of 0.2 per cent," the agency said.
Wholesale trade fell 1.4 percent in August as most subsectors contracted, with motor vehicle and parts wholesalers seeing their first decline in seven months amid lower vehicle imports and weaker manufacturing activity.
Work winding down to prepare the 2026 census drove widespread contractions in public administration, while maintenance outages at nuclear power plants in Ontario and New Brunswick dragged down the utilities sector, which contracted 0.4 percent.
Retail trade was a bright spot, posting 1.2 percent growth and more than making up for a decline in July.
Manufacturing rose 0.3 percent, its fifth increase in seven months, and the transportation and warehousing industry and finance and insurance sector also saw gains.
The construction sector grew 0.2 percent while mining, quarrying and oil and gas extraction was flat, with strength in mining offset by a decline in oil and gas extraction.
Oil sands extraction was the biggest drag on growth due to maintenance at some facilities in northern Alberta.
Statistics Canada said a decline in the services sector was mostly offset by a rise in activity in the goods-producing sector, which contributes roughly a quarter of GDP.
Services-producing industries declined by 0.1 percent, led by the 1.4 percent drop in wholesale trade.
The public sector aggregate, which comprises educational services, health care and social assistance and public administration, fell 0.2 percent in August, its first decline in six months.
Despite flat growth in July and August and signs of a decline in September, Statistics Canada's flash estimates still see real GDP expanding 1.3 percent on an annualized basis in the third quarter.
That would be a slowdown from 3.3 percent growth in the second quarter and substantially lower than the Bank of Canada's latest projection of two percent annualized growth for the quarter.
The central bank raised its benchmark interest rate by a quarter point to 2.5 percent on Wednesday, its first hike in more than three years.
Money markets are pricing in expectations that the Bank of Canada will leave its key interest rate unchanged in December but raise it by 25 basis points in January to 2.75 percent.
The Canadian dollar was trading up 0.26 percent to C$1.3951 to the U.S. dollar, or 71.68 U.S. cents.
Yields on the two-year Canadian government bond were down five basis points to 2.618 percent.
Statistics Canada will provide its official quarterly estimates for the third quarter next month when it reports the September GDP figures.
This story was written by the e2gold.ca newsroom from reporting by CBC News, CTV News, WSAU and AOL.com. Quotes are checked word for word against that reporting.