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Even before Friday’s surprisingly weak fourth-quarter gross domestic product report, the Bank of Canada was widely expected to hold interest rates steady at its meeting this week.

Now, as signs of a slowdown mount, the central bank could decide to stay on the sidelines for the rest of the year or even longer, according to economists who will be watching Wednesday’s statement for clues about the central bank’s intentions.

“You have a backdrop where they were already concerned about uncertainties around trade, uncertainties about housing and household debt, and now you have the broader economy performing a little worse than they had expected,” Benjamin Reitzes, Canadian rates and macro strategist with BMO Capital Markets, said in an interview.

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“There are more than enough reasons for them to be cautious in the statement.”

In the slowest pace of expansion in two and a half years, Canada’s GDP grew at an annualized rate of just 0.4 per cent in the final three months of 2018. The growth was less than half of what economists had expected and was capped by a decline of 0.1 per cent month-over-month in December – the third drop in four months.

The fourth-quarter slowdown reflected weakness in business investment and household spending, among other factors. Given the economy’s precarious state, BMO projects that the central bank won’t raise the benchmark overnight rate – currently at 1.75 per cent – until its December meeting. But if the weak fourth-quarter growth persists well into 2019, all bets are off.

“If we don’t get the foreseen rebound in the second quarter and through the middle of the year then there is a good chance [the rate hike] could get delayed even further,” Mr. Reitzes said.

Bank of Canada Governor Stephen Poloz does not have a scheduled news conference after Wednesday’s meeting, but deputy governor Lynn Patterson will deliver an economic progress report in Hamilton on Thursday.

In sharp contrast to the weak GDP data, Canada’s job market has been churning out solid gains. Over the past five months, the economy added 230,000 jobs – the best showing since 2002. But “that pace is unsustainable and we suspect we’ll see a sharp moderation in February,” National Bank Financial said in a note to clients.

Statistics Canada will release its February labour force survey on Friday, and economists expect, on average, that the economy added about 11,000 jobs, a marked slowdown from the 66,800 positions created in January. National Bank is more pessimistic, predicting a loss of 20,000 jobs.

The Canadian economic calendar also includes the December merchandise trade balance, scheduled for release on Wednesday, and February housing starts, on deck for Friday.

“Housing starts have showed signs of life during the past three months, but building activity could be cooling down,” CIBC World Markets analyst Royce Mendes said in a note.

Unseasonably warm weather in the fourth quarter could have pulled some construction forward, but permit data have “held up quite well recently,” Mr. Mendes said, suggesting housing starts may have moderated to an annualized rate of about 201,000 in February, down from 208,000 in January.

In the United States, Friday’s employment report is also expected to show some moderation in job growth. After non-farm payrolls expanded by 2.7 million in 2018, the U.S. economy started 2019 on a high note, adding 304,000 jobs in January. Economists expect February’s increase to be about 185,000 jobs, which is still a solid number.

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