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Canada's Economy Finished 2016 With A Bang

Growth comes in strong, but there are clouds on the economic horizon.

Canada ended a shaky year for its economy on a strong note, growing at an annual rate of 2.6 per cent in the final three months of 2016, stronger than the 2 per cent economists had largely been expecting.

Consumers deserve much of the credit, as household spending contributed the most to economic growth, Statistics Canada said.

The strength was widespread, with most major sectors of the economy expanding in December -- except for retail, which shrank by one per cent. However, that may be due to more holiday shopping being done in November during Black Friday sales.

Canada's GDP has seen the first two back-to-back quarters of strong growth since 2014, StatsCan data shows. (Chart: Statistics Canada)

Mining, oil and gas was the other exception to the trend, shrinking 0.4 per cent in December.

One notable negative in the report was the decline in business investment, which fell 2.1 per cent in the quarter and has overall been lacklustre since the oil price collapse.

Since business investment is a key driver of job growth, those numbers suggest a weak job market in the months to come.

For 2016 as a whole, Canada's economy grew 1.4 per cent, somewhat better than the 0.9 per cent growth it clocked in 2015 -- a year in which Canada experienced a technical recession.

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