By Dean Popplewell
The Canadian economy unexpectedly shrank by 0.1 percent in August from July, pointing to slower growth in the third quarter than in the first half of the year and supporting a Bank of Canada message that interest rate hikes are less imminent.
The surprisingly poor performance prompted economists to mark down their forecasts and sent the Canadian dollar skidding to a session low against its U.S. counterpart.
The Canadian economy recovered more quickly than most from the global recession, and is set to grow at slightly more than 2 percent this year despite uncertainty from the choppy U.S. recovery and the European debt crisis.
The dip was the first monthly fall in GDP since February, and was largely caused by decreased production in the natural resources sector – oil and gas extraction and mining – as well as in manufacturing, Statistics Canada said on Wednesday.
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