Strong consumer spending powered Canada’s Gross Domestic Product (GDP) to 5.4% annualized growth in this year’s third quarter, according to Statistics Canada.
The result is a turnaround for an economy that shrank in the second quarter, and outpaced economists’ expectations for GDP growth between July and September.
Statistics Canada said that household spending rose in the quarter as restrictions eased, creating a greater demand for exports. In all, consumer spending rose by an annualized 18% in the third quarter, the second biggest increase going back to the early 1960s.
Most of the consumer spending was on services, many of which had been closed earlier this year. Canadian households have added $319 billion in new savings since the start of the pandemic.
The third quarter ended with the economy edging up by 0.1% in September. Statistics Canada said that preliminary data suggests the economy grew by 0.8% in October to start the final quarter of the year.
Statistics Canada also said that total economic activity remains about 0.5% below the pre-pandemic level recorded in February 2020.
