08:54 AM EDT, 10/31/2024 (MT Newswires) -- Canadian gross domestic product was both "trick and treat" on Thursday, with weakness at the start of Q3 followed by a "solid" rebound during its final month, said CIBC.

Monthly GDP was flat in August, which was in line with the consensus forecast but followed a downwardly revised 0.1% month-over-month gain in the prior month -- previously it was 0.2% month-over-month higher, noted the bank.

Weakness in August was partly the result of a brief rail stoppage, which led to a near 8% monthly decline in that sector, although other areas such as manufacturing, utilities and wholesaling also saw declines, pointed out CIBC.

These declines were offset by growth in areas including public administration, finance and retail. With August GDP partly held back by temporary factors, the bank expected a rebound in September and the advance estimate of 0.3% month over months points to just that.

However, even with the "solid" September figure, due to the downward revision at the start of the quarter, for Q3 as a whole growth is still tracking weaker than it was before Thursday's release and slightly below the Bank of Canada's already downgraded forecast -- 1.0% versus 1.5% in the October Monetary Policy Report and 2.8% in the July MPR.

While the final expenditure figures can diverge from the monthly industry data, and the BoC will have these quarterly figures at hand before its next rate decision in December, for now, this data supports the bank's call for another 50bps cut at the next meeting in an effort to try and accelerate growth and reduce slack in the economy.