Canadian economy grew slightly in November

The Canadian economy grew slightly in November and appears to have stalled further at the end of the year as higher interest rates began to slow spending.

Statistics Canada's preliminary estimate for real GDP in December indicates that the economy held steady, suggesting that the economy grew at an annualized rate of 1.6% in the fourth quarter of last year.

By comparison, the economy grew at an annualized rate of 2.9% in the third quarter of 2022.

The stagnant growth comes after the economy grew 0.1% in November, the federal agency said Tuesday.

Real domestic product growth for the month was driven by the public sector, transportation and warehousing, and finance and insurance.

The Statistics Canada report noted that the removal of travel restrictions by COVID-19 spurred growth in transportation and warehousing.

Meanwhile, construction, retail trade, and accommodation and food services contracted.

The housing market was the first to feel the effects of interest rate hikes, leading to a slowdown in housing-related sectors.

That slowdown is expected to spread to other sectors of the economy as higher borrowing costs force consumers and businesses to reduce spending.

Statistics Canada estimates that by 2022, the economy will grow by 3.8%.