CIBC says Canada’s economy probably shrank in January
Retail figures declined in January according to data released by StatsCan on Friday and CIBC economists believe that the unexpected drop in consumer spending is a sign that the economy shrank. Andrew Grantham wrote in a client note that "The latest figures suggest that households are becoming more cautious in their spending habits." Although it was expected that spending on gasoline would be lower due to prices, the retail data showed decline in 11 sectors, which had not been expected by analysts. Many economists are cautious about growth predictions for this year due to the continued slump in oil prices although a weaker loonie is helping exporters. There is also no consensus on whether GDP declined in January; Capital Economics for example says there was a 1 per cent gain.