Categories: General
Date: July 28, 2010
Title: Slow growth predicted: Economic signs expected to stop short of double dip
Those looking for signs of a double-dip recession will likely have trouble finding them in the coming week, analysts say.
The main economic data on tap will focus on growth in Canada and the United States, with the release of reports Friday in both countries on gross domestic product.
While they are expected to show the North American economy cooling off , the reports are unlikely to hint at either country slipping into negative growth, said BMO Capital Markets economist Benjamin Reitzes.
"For Canada, we expect continued growth but ebbing momentum," said Reitzes, whose forecast calls for tepid 0.1 per cent monthly growth in the country's economy in May, following stellar annualized growth of 4.9 per cent in the final quarter of last year and 6.1 per cent in 2010's first quarter. The consensus among most economists is for an increase of between 0.1 and 0.2 per cent in May.
"That's to be expected at this point. You get a big bounce off inventory rebuilding after the end of the recession and pent-up demand, but that fades and growth slows.
"In the U.S., it's essentially the same story. We still expect growth in the second half."
TD Economics senior economist James Marple said he is expecting U.S. growth to slow to a 2.1 per cent annualized rate in the second quarter, while the consensus of economists surveyed is calling for 2.5 per cent, following on 3.5 per cent average growth over the past three quarters.
Despite the end of the home-buyer's tax credit and reduced retail spending on building materials, Marple sees a silver lining in business spending on equipment and software, which has been strong in the second quarter.
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