CIBC Notes "Very Noisy" GDP Data From Trade in Canada

08:56 AM EST, 11/28/2025 (MT Newswires) -- The Canadian economy bounced back in Q3, with the 2.6% annualized gross domestic product gain more than offsetting the 1.8% decline seen in Q2, said CIBC after Friday's data.

That was well above the consensus forecast of 0.5%, but the composition of growth wasn't ideal, as an 8.6% drop in imports was the main driver of growth, with exports up only slightly at 0.7% -- a fraction of the 25% drop seen in Q2, noted the bank.

Stripping trade/inventories out showed that final domestic demand dropped off by 0.1%, as consumption and business investment decreased, while residential investment advanced, pointed out CIBC.

However, that does follow an impressive 3.5% gain in Q2 final domestic demand. The household saving rate ticked up to 4.7%, highlighting consumer caution and also leaving room for a drawdown ahead to support consumption.

The monthly data showed a healthy end to Q3, with September GDP rising by 0.2% as CIBC expected, but the October advance estimate for a 0.3% month-over-month decline suggests a sluggish Q4 following the Q3 upside surprise.

Overall, a "very noisy" report due to large swings on the trade side, but this cements the on-hold story for the Bank of Canada in December, according to CIBC.

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