Tom Sweeney

It's a coming of age tale….

Posts Tagged ‘Economy’

Canadian economy grows 6.1% in first quarter

Posted by sweens on May 31, 2010

The Canadian economy was roaring in the first quarter, jumping ahead of even the rosy estimates of economists to post an oversized 6.1 per cent annualized advance during the first three months of 2010.

It was the largest quarterly expansion in more than a decade.

The number doubled what the U.S. economy managed to produce and bettered the consensus forecast for a 5.8 per cent increase.

As significant was that output in March, the last month of the quarter, advanced 0.6 per cent from February, giving the economy a strong hand-off to the second quarter.

With the Bank of Canada scheduled to make a decision on interest rates on Tuesday morning, the gross domestic product data is expected to add to the pressure on governor Mark Carney to move rates higher for the first time in about three years.

“It would take some fancy footwork for the Bank of Canada to pass on hiking rates tomorrow after the Canadian economy just doubled the U.S. quarter-one growth pace,” Scotiabank economists Derek Holt and Karen Cordes Woods wrote in a note.

“This is the strongest growth pace witnessed since 1999 and it is the latest evidence of how the Canadian economy and Canadian markets are outperforming much of the rest of the industrialized world.”

They noted that the level of the economic activity in Canada is now roughly back to where it stood prior to the recession taking hold in the fourth quarter of 2008.

One a quarter-over-quarter basis, GDP advanced 1.5 per cent following a 1.2 per cent increase in the fourth quarter.

Statistics Canada credited consumer spending, housing and manufacturing for the stellar results, but all industries were solidly in the plus column.

While markets expected a strong result, the oversized growth pushed the Canadian dollar up more than three-quarters of a cent to 95.89 cents US in light early trading. U.S. markets were closed for Memorial Day on Monday.

Economists caution that the torrid pace of growth cannot continue, and with European woes weighing down global prospects, the moderation in Canadian output may have already begun.

“We are of the view that much better-than-expected consumer spending and housing market performances so far this year came at the expense of future growth,” said TD Bank’s Diana Petramala.

“The recent spending spree has left consumers even more fatigued and highly indebted than ever. As interest rates begin to rise (as early as this week) and households have to devote a greater share of their income to servicing their debt, this may well constrain future consumer spending growth.”—World/2010-05-31/article-1196324/Canadian-economy-grows-6.1%25-in-first-quarter/1

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Canadian dollar continues to slide…

Posted by sweens on March 10, 2009

The Canadian dollar fell to an all time low since 2004 yesterday as it reached 76.53 cents on the US dollar. This represents the lowest rate since September of 2004 which was prompted by a sharper then expected decline in new home construction in Canada.

The drop in the Canadian dollar came promptly after a report came out stating that Canadian housing starts fell 12.3% in February to a seasonally adjusted annualized rate of 134,600 units from 153,000 in January.

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Canada has worst 4th quarter since early 90’s

Posted by sweens on March 2, 2009

Reports coming out of Ottawa today claim that the Canadian economy shrank more in the 4th quarter then at any time since 1991.  Statistics Canada is reporting that the economy shrank at an annualized rate of 3.4% in the 4th quarter confirming that the country is now in a recession and reinforces expectations of a central bank interest rate cut.

This quarter was the worst performance since 1991 when the economy shrank by 5.9% in the first quarter. 

Despite the economic decline, the results were slightly better then expectations.  Projections pegged the Canadian economy to shrink by 3.6% in the quarter. The report goes on to explain that the economy is almost as bad as expected with spending down in all areas except Government. 

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