Looking at the chart, you can see a slowdown in key industries. Construction is shrinking as high rates weight on the market; tech and media are on the downswing after over-extending during the pandemic; and banks are starting to cut back. But regardless of headwinds on Bay St and Silicon Valley, it’s a picture of robust growth on ”main street”: hospitality, retail, real estate and logistics are all up well above the overall average of +1.1% annually.
However, there’s one downside to this unexpected growth: this may slow down rate cuts, as the Bank can point to growth in spite of high rates. Doug Porter of BMO concluded GDP growth ”affords policymakers the ability to gently push back on easing chatter, as they wait for underlying inflation to come down further.”