Canadian economy grows slower than expected in the fourth quarter
Canada’s central statistics agency accidentally released closely watched growth figures early on Friday, surprising traders and taking a dent out of the loonie.
Quarterly gross domestic product data was being circulated on Twitter as early as 8:04, with normal release due at 8:30 sharp. Compounding the surprise, the numbers showed Canada’s economy unexpectedly came pretty much to a halt in the final three months of 2018, growing at an annualized pace of 0.4 percent, well below the 1 per cent economists had forecast.
“Obviously I care more about the figures and some of the details to it, but that just adds to the disappointment of the headlines,” Doug Porter, chief economist at Bank of Montreal, said by phone from Toronto. “You would think that Stats Canada -- especially on a release like this -- would have their ducks in a row and with all the experience they have they wouldn’t make an error like this.”
Peter Frayne, chief of communications for the government statistics agency, acknowledged the early release and said the matter is being investigated.
The country’s currency fell sharply once traders got wind of the numbers, reversing an earlier gain and depreciating as much as 0.5 per cent to $1.3241 against the greenback.
Brian DePratto was among the first to notice the agency’s error. “I have an RSS Reader product that I use for work, and my usual process when I come in is to fire up the reader and get a sense of the newsflow,” the senior economist at Toronto-Dominion Bank said by phone. “And then I opened up the page and saw the Statscan feed had a bunch of new items on it, including those numbers. I was like, ‘oh -- that looks like the GDP data,’ and I clicked through and there was a 404,” he said, referring to an Internet message indicating a webpage server issue.
Statistic Canada isn’t a stranger to controversy. The agency for years earned the ire of economists by releasing jobs and inflation data earlier than other data, a practice it ended in 2011. Around the same time, it admitted to allowing some distributors to get information almost a minute ahead of the official release, a practice that led to an investigation by KPMG LLP.
It later emerged that Statistics Canada released economic reports a day before publication to at least 69 government workers and political aides, a practice that led to a review by lawmakers amid concern it was undermining investor confidence, given the risk the data could be leaked to financial markets.
Porter says, though, he hasn’t had big concerns lately about Statistics Canada and that the GDP data should have been handled more carefully. “It did move the markets -- so this was an important piece of news and one that shouldn’t have been released early,” he said.