Canadian economic growth 'gangbusters' in second quarter thanks to consumers

Posted September 01, 2017

A consensus of economists had predicted the quarter would be 3.7 per cent, on par with the first quarter.

Indeed, families appeared to have room to both spend and save more, with the household savings rate rising a notch, to 4.6 per cent from 4.3 per cent in the first quarter. It is the pace of expansion the fastest in a little over two years.

The second-quarter result likely cements the likelihood of at least one more rate increase from the Bank of Canada in 2017.

Exports and household spending were the main contributors toward the surprise second-quarter performance. Consumer spending have played their traditional role as the locomotive accelerating to 3.3 % from 1.9% in the previous quarter.

Despite almost uniform skepticism from mainstream economists, he insisted that much faster economic growth was within reach. In addition, the u.s. president still has not managed to enact a law in the economic field, due to political deadlock in Congress. In comparison, residential real estate expanded 2.9% in the first quarter.

Zandi is forecasting that growth in 2018 will be an even stronger 2.8 percent. "But it should not be taken for granted, the u.s. economy is not growth of 3 %", adds he. The fastest-growing large economy, China's, grew 6.7 percent past year.

It is the expansion of the GDP of the United States from April to June.

What happened to Mexico paying for the border wall?
But he implored him to stop saying so publicly, according to transcripts of the January 27 call obtained by The Washington Post . The tweet spurred a spike in investor concern that Congress and the White House may not act in time.

"Even as we see daylight in today's economy, we find ourselves in the shadow of daunting longer-term challenges to economic growth and shared prosperity", said John Williams, president of the Federal Reserve Bank of San Francisco, in an august 2 speech.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bullish at 77.196, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 99.9839. And I think we can go far beyond 3 %. "There is no reason why we should not".

Hitting the White House growth target for the first time in Donald Trump's presidency, Gross Domestic Product (GDP) increased 3 per cent in the April-June period, the Commerce Department reported. Some are now saying that the devastation from Hurricane Harvey could shave about a half-percentage point off growth this quarter.

"Overall the US economy and labor market remain in good shape, and will easily withstand any temporary drag from Harvey", Gus Faucher, chief economist at PNC Financial, wrote in a report on Wednesday.

In front of this more dynamic growth and a market of close work, now arises the question of the reaction of the central bank.

"Still, this will be, to the extent possible, a 'dovish hike, ' as the Bank will hint at a likely pause after September, lest markets push the Canadian dollar with too much enthusiasm and threaten downside pressure on exports and CPI".