Alaskajade / 123RF

Based on the latest economic data releases, fourth-quarter growth is looking strong, according to Scotiabank Economics’ models.

With Friday’s strong jobs data, coupled with other recent readings, the model is forecasting fourth-quarter GDP growth of 6.48%, up from the previous reading of 5.7%, Scotia said in a research note.

“Available data show a very strong start to Q4,” it said.

The latest data on the labour market showed rising employment and hours worked, which represented “just the latest piece of evidence of economic strength,” Scotia said.

This followed strong data on manufacturing, wholesale and retail sales, and industry level GDP, it noted.

While an ongoing rebound in services remains an upside risk to the forecast, the recent data don’t capture the impact of flooding in British Columbia or the emergence of the Omicron variant, which could weigh on activity.

“While the impact of the B.C. disaster will likely start to show up in the industry-level data for November, the impact of the Omicron variant will be more difficult to see if it leads to caution on the part of consumers and workers without explicit public health measures being introduced,” Scotia said.

“For the Bank of Canada, this confluence of temporary factors weighing on the short-term outlook is likely irrelevant, unless it has durable implications for the inflation outlook,” it added.