Canadian GDP sees strongest half-year growth in 15 years: StatsCan

Posted September 01, 2017

"The general situation of the economic growth remain unchanged, with an increase in consumer spending and investments in non-residential real estate more important than in the previous quarter", said the ministry, stressing that " these increases were partially offset by a slight decline in public spending ". But earnings began to recover a year ago as crude prices stabilized, and exporters are getting a boost because the dollar has weakened since early 2017.

Even with the expected upward revision, GDP growth is still falling short of the optimistic goals President Donald Trump hopes to achieve through tax cuts, regulatory relief and tougher enforcement of trade agreements.

Business investment on non-residential structures, machinery and equipment rose 7.1 percent.

Canada's performance in the first six months of the year was the strongest since 2002 on a non-annualised basis and has made the country a growth leader among its industrialised peers.

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Economists have said this may be unrealistic in the best of times, and Trump's growth agenda remains stalled in Congress.

The second quarter was also substantially above the Bank of Canada's forecast and extended a recent strong run for the economy that prompted the central bank to raise rates in July for the first time in seven years. Services sector, meanwhile, grew at a slow and stable rate of 0.2 percent on comparatively widespread gains, stated TD Economics. Most are betting on an October hike, with the likelihood at 86.8 percent, up from 72.4 percent.

For the entire year, Mark Zandi, chief economist at Moody's Analytics, is forecasting growth of 2.1 percent. It's more than double the pace of the first three months of 2017 and better than original estimates for the second quarter.

Within minutes of the report coming out, currency traders started upping the odds that the Bank of Canada will hike its benchmark interest rate when it meets next week.

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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.

The u.s. economy has greatly accelerated its pace of growth in the second quarter, reaching the 3% target set by the us president, Donald Trump, even if this performance could be hard to maintain over time.

Earlier this month, Container Store Group's CFO Jodi Taylor said that the company "has seen solid growth in the higher-ticker portion" and holds "the opinion that the customer is still spending".

Increased business spending also helped lift the latest estimate above Commerce Department's initial reading of 2.6 percent for the quarter. "This could subtract 0.2 % to third quarter GDP growth, although this may be higher when the estimates on the damages will be available", stresses Chris Low, chief economist FTN Financial.

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