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The December trade deficit narrowed but there are some details behind these numbers that are raising some doubts to Nathan Jazen, a senior economist at the Royal Bank of Canada. 

Key quotes

“The bulk of the 1.9% increase in exports in December came from a bounce-back in energy shipments after disruptions to a major pipeline reduced exports in November. Excluding energy products, export volumes were little changed, by our count, in December but were still up less than a percent from a year ago and declined about 3% at an annualized rate in Q4 as a whole.”

“Concerns in Canada have been shifting from external to domestic growth worries. And imports were also soft in Q4, with volumes down almost 5% on an annualized basis in the quarter as a whole.” 

“The pullback is still not a good sign for near-term domestic demand growth. Equipment imports fell for a fifth straight quarter in Q4 and declined almost 3% excluding price-effects in December.”