Weekly Economic Report
November 3, 2014
No Treats for You on Halloween Day Canadian Real GDP at Basic Prices - August Canadian real GDP stumbled 0.1% in August, following the disappointing flat performance in the prior month. Even with the solid growth pace in the spring and early summer, the recent two-month lull suddenly leaves the economy on a subpar path. As a result, the BoC’s latest estimate for growth in Q3 is 2.3%, not as strong as the sturdy 3.5% quarterly advance reported by the U.S. for the same quarter. The Oil & Gas sector was the main culprit, and recall, this was before oil prices started sliding significantly. Energy extraction fell by 2.5% and supporting activities were down 4.3%. This offset an increase in mining (+2.0%). This report shows that the Canadian economy seemed to be relatively unproductive during the summer break as well, managing less than a 1% annualized growth rate in the past three months.
U.S. Economy Retains Strength U.S. Real GDP – Q3 Advance U.S. real GDP grew 3.5% annualized in Q3 after a +4.6% bounceback in Q2. This beat market expectations (3.0%) because of a 16% surge in federal defense spending, which added 0.7 percentage points to growth. Barring this special factor, growth would have fallen a bit short of expectations, though it still marks a meaningful improvement in performance compared with recent years. Business investment led the way with a 5.5% advance for non-residential spending; exports were also surprisingly strong at 7.8%; consumer spending slowed as expected to 1.8%. Though flattered by a big boost in defense spending and lacking some of the momentum that may have been anticipated, the economy posted fairly decent underlying growth in the third quarter.
Important Economic Statistics
The Week Ahead Canadian Merchandise Trade Balance – September - Tuesday, November 4, 2014 at 8:30am
United States Q3 Productivity - Thursday, November 6, 2014 at 8:30am
Canadian Employment Report – September - Friday, November 7, 2014 at 8:30am
United States Employment Report – September - Friday, November 7, 2014
Ronald Chow, Chief Economist • ronaldchow@crescentschool.org