The 1.3% increase in GDP in Q1 was a bit softer-than-expected — both by markets and the Bank of Canada who it turns out could have stuck with their 1.3% call from January rather than hinting at some upside risk in yesterday’s policy rate announcement. Notwithstanding the headline miss, though, details were relatively solid. On a monthly basis, weakness was concentrated in January with March output rising 0.3% after a 0.4% February gain to leave stronger momentum entering the second quarter. Final domestic demand rose a solid 2.1% in Q1, led by a big 10.9% jump in business investment. Residential investment fell 7.2%, but that was expected given the big drop in home resales earlier this year. Consumer spending rose just 1.1% on a quarter-over-quarter basis but was still up almost 3% from a year ago.
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