Canadian 3Q economy surprises with gain

Ottawa -- The Canadian economy surpassed expectations in the third quarter, with an annual gain of 1.3 percent, the Statistics Canada agency reported from Ottawa Monday.

The year-over-year increase was fueled largely by gains made in July, the report said.

"Economic growth has been weak since the beginning of the year, as foreign demand has weakened and growth of domestic demand has slowed," StatsCan said.

Exports of goods and services fell 1.4 percent in the third quarter, and imports declined 1.6 percent in the third quarter. Growth in the volume of personal spending slowed for the third consecutive quarter to 0.2 percent.

Corporate profits were up 5.7 percent in the quarter, and farm income was also "up substantially" driven by high grain and oilseed prices, the report said.

Employment was down 0.1 percent in the quarter although overall personal income grew 0.7 percent. The national saving rate slipped to 3 percent, StatsCan said.

The Globe and Mail quoted a caution to investors by Charmaine Buskas, economics strategist for TD Securities.

"Though the third-quarter gross domestic product data was a nice surprise, the writing is on the wall for the fourth quarter, which is shaping up to be pretty ugly," Buskas wrote.

Copyright 2008 by United Press International.