However, not all indicators were upbeat. Employment dropped by 41,000 in July, though hours worked fell by just 0.2% and remained above Q2 averages through August.
Meanwhile, the Bank of Canada’s next moves are under scrutiny. Policymakers cut the overnight rate for the first time since March in September, but further reductions are likely to hinge on incoming data.
“Unless there is a drastic turnaround in softening employment trends and easing core inflation in September, we think the likelihood for another cut in the October meeting is high,” Claire Fan, senior economist at RBC, previously said.
Market watchers are split on how quickly the central bank will act. “Our tracking for GDP growth in early Q3 is not significantly different than the BoC’s, but the decision to cut again (or not) in October will depend heavily on early October trade and labour market data, as well as the results from the BoC’s Business Outlook Survey,” RBC said.
South of the border, US personal spending was expected to edge up by 0.5% in August, with income growth slowing to 0.3%. These trends, coupled with stagnant wage growth and mixed signals from the auto and retail sectors, could influence Canadian economic sentiment and, by extension, mortgage market dynamics.