Canadian economy expands 0.1% in May

Canada's gross domestic product expanded by 0.1 per cent in May as goods-producing industries helped offset a decline in the service sector.

The gain was roughly in line with economists' expectations.

Oil and gas extraction helped boost the goods-producing sector's output by 0.6 per cent, Statistics Canada said Friday.The mining sector expanded by 3.4 per cent, the third straight monthly gain.

That offset a 0.1 per cent decline in the service sector, which was dragged downin part bya dropin output fromreal estate agents and brokers.

Sales of existing homes fell significantly in several parts of the country, bringing an 11.3 per cent decrease in output from the sector in May. It was the fifth straight monthly decline in the sector.

It's the second straight month that the service sector as a whole has declined.

"Its clear that Canada's economic momentum is ebbing," BMO economist Benjamin Reitzes said. "Despite soft readings in April and May, Q2 real GDP is still on track for growth in the mid-two per centannualized range, due to the strength in March."

"Unless we get a big pop in June GDP, look for growth to slow further in Q3," he said.