Canadian Mortgage News
May 31, 2010
Canada’s hot economy tops forecasts
The Canadian economy expanded by a stronger-than-expected 6.1 per cent in the first quarter, the biggest increase in a decade, boosted by a hot housing market and consumer spending.
The country’s gross domestic product grew at the fastest annualized pace since 1999. It has expanded for seven months in a row and climbed 0.6 per cent in March, Statistics Canada said Monday.
The release, landing one day ahead of the Bank of Canada’s interest rate decision, fuelled expectations of a rate hike and sent the Canadian dollar higher. It’s the latest in a series of reports showing everything from employment and retail sales to trade and manufacturing is gathering steam.
“With the monthly numbers showing strong momentum late in the first quarter, the Bank of Canada will take reassurance that this strength is likely to be sustained near term,” said Paul Ferley, assistant chief economist at Royal Bank of Canada.
That reinforces the belief that the central bank will boost rates Tuesday, though “financial market volatility, related to concerns about sovereign debt particularly in Europe, does present one factor that could potentially keep the central bank on the sidelines.”
Economists had expected the economy to grow 5.9 per cent in the quarter and 0.5 per cent in the month. Most economists, including Toronto-Dominion Bank’s Diana Petramala, expect the pace of grow to slow in the coming quarters.
Production ramped up in the quarter, and inventory levels rose after being drawn down throughout last year, Statscan said. Residential investment has increased for four straight quarters, and so has consumer spending on goods and services. Export and import volumes are also expanding.
The January-to-March growth spurt far outstrips the pace south of the border, as the U.S. economy grew 3 per cent.
Please click HERE to read the complete article.
The Canadian economy expanded by a stronger-than-expected 6.1 per cent in the first quarter, the biggest increase in a decade, boosted by a hot housing market and consumer spending.
The country’s gross domestic product grew at the fastest annualized pace since 1999. It has expanded for seven months in a row and climbed 0.6 per cent in March, Statistics Canada said Monday.
The release, landing one day ahead of the Bank of Canada’s interest rate decision, fuelled expectations of a rate hike and sent the Canadian dollar higher. It’s the latest in a series of reports showing everything from employment and retail sales to trade and manufacturing is gathering steam.
“With the monthly numbers showing strong momentum late in the first quarter, the Bank of Canada will take reassurance that this strength is likely to be sustained near term,” said Paul Ferley, assistant chief economist at Royal Bank of Canada.
That reinforces the belief that the central bank will boost rates Tuesday, though “financial market volatility, related to concerns about sovereign debt particularly in Europe, does present one factor that could potentially keep the central bank on the sidelines.”
Economists had expected the economy to grow 5.9 per cent in the quarter and 0.5 per cent in the month. Most economists, including Toronto-Dominion Bank’s Diana Petramala, expect the pace of grow to slow in the coming quarters.
Production ramped up in the quarter, and inventory levels rose after being drawn down throughout last year, Statscan said. Residential investment has increased for four straight quarters, and so has consumer spending on goods and services. Export and import volumes are also expanding.
The January-to-March growth spurt far outstrips the pace south of the border, as the U.S. economy grew 3 per cent.
Please click HERE to read the complete article.