March 2010
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Solid recovery number expected in Q4 GDP report
OTTAWA - The recession has been technically over in Canada for more than half a year, but on Monday it`s expected the country will finally get a satisfying number to signify the recovery.
Canada`s three-quarter recession was officially over in last year`s third quarter, which saw slight annualized growth in gross domestic product of 0.4 per cent. Economists anticipate that expansion accelerated to four per cent in 2009`s last three months. Statistics Canada will report fourth-quarter GDP on Monday.
"There are many reasons to believe that the economic engines were moving full-steam ahead in the fourth quarter, and we think the recovery will become much more apparent when real GDP growth of four per cent . . . is likely recorded," Diana Petramala, economist with TD Securities, said in a report Friday.
Petramala said the economy`s recovery is based on consumer spending, household investments and exports. One of the few lacking elements, she said, is business investment. She said that "leading indicators suggest both investment in machinery and equipment, and non-residential construction contracted in the quarter."
CIBC World Markets economist Peter Buchanan is forecasting GDP growth of as much as 4.2 per cent, citing improvement in exports and a hot residential-construction sector.
Read the full article here.
OTTAWA - The recession has been technically over in Canada for more than half a year, but on Monday it`s expected the country will finally get a satisfying number to signify the recovery.
Canada`s three-quarter recession was officially over in last year`s third quarter, which saw slight annualized growth in gross domestic product of 0.4 per cent. Economists anticipate that expansion accelerated to four per cent in 2009`s last three months. Statistics Canada will report fourth-quarter GDP on Monday.
"There are many reasons to believe that the economic engines were moving full-steam ahead in the fourth quarter, and we think the recovery will become much more apparent when real GDP growth of four per cent . . . is likely recorded," Diana Petramala, economist with TD Securities, said in a report Friday.
Petramala said the economy`s recovery is based on consumer spending, household investments and exports. One of the few lacking elements, she said, is business investment. She said that "leading indicators suggest both investment in machinery and equipment, and non-residential construction contracted in the quarter."
CIBC World Markets economist Peter Buchanan is forecasting GDP growth of as much as 4.2 per cent, citing improvement in exports and a hot residential-construction sector.
Read the full article here.
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Bracing for rate rise
OTTAWA - Pressure on the Bank of Canada to move early on raising interest rates mounted yesterday after data on fourth-quarter gross domestic product suggested the economy is roaring its way out of recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25% until July to pump up economic growth after the great recession.
Data from Statistics Canada suggest the emergency-level rates have worked, maybe faster and better than anticipated.
The economy expanded 5% in the final three months of 2009, blasting past market expectations for a 4% gain--and the bank`s own 3.3% forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9% as opposed to the original 0.4% reading.
Read the full article here.
OTTAWA - Pressure on the Bank of Canada to move early on raising interest rates mounted yesterday after data on fourth-quarter gross domestic product suggested the economy is roaring its way out of recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25% until July to pump up economic growth after the great recession.
Data from Statistics Canada suggest the emergency-level rates have worked, maybe faster and better than anticipated.
The economy expanded 5% in the final three months of 2009, blasting past market expectations for a 4% gain--and the bank`s own 3.3% forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9% as opposed to the original 0.4% reading.
Read the full article here.
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Highlights: Canada`s Q4 GDP Report
Here are highlights from Canada Q4 GDP report. The economy expanded at an annualized 5%, compared with expectations of about 4% and an upwardly revised 0.9% in the third quarter:
*Quarterly gain largest since Q4, 2000
*Consumer spending rose annualized 3.6%
*Residential investment was up 29.7%
*Government spending up 5.8%
*Business investment was the main source of weakness dropping 8.8%, RBC says
Read the full article here.
Here are highlights from Canada Q4 GDP report. The economy expanded at an annualized 5%, compared with expectations of about 4% and an upwardly revised 0.9% in the third quarter:
*Quarterly gain largest since Q4, 2000
*Consumer spending rose annualized 3.6%
*Residential investment was up 29.7%
*Government spending up 5.8%
*Business investment was the main source of weakness dropping 8.8%, RBC says
Read the full article here.
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Canada`s Q4 GDP: Economists` reactions
The latest Statistics Canada report on Canada`s gross domestic product showed the country`s economy grew by 5% on an annualized basis in the fourth quarter of 2009. Here`s what economists had to say about it:
Derek Holt and Karen Cordes, economists, Scotia Capital Inc.
Canada landed a fifteenth gold medal this morning with recovery evidence that exceeded expectations. This is further evidence in support of the risk the BoC goes in Q2 with a material bias shift in tomorrow`s statement that builds upon recent communications. The pace of the recovery is now materially stronger than the BoC`s expectations, and inflation is proving stickier than the BoC had anticipated. Sustainability into Q1 at these growth rates is questionable, but it`s difficult to still defend the need for emergency levels of monetary stimulus at the zero lower bound on rates if growth and inflation are exceeding expectations and funding concerns are all but gone. Not only did Q4 beat expectations, but December`s 0.6% m/m increase in real GDP was also much stronger than consensus expectations of 0.4% m/m and slightly faster than our own estimate of 0.5% m/m.
Paul Ferley, assistant chief economist, RBC Economics Research
The strong rise at the end of the fourth quarter suggests strong momentum going into the first quarter of this year. The robust jump in Q4 GDP growth is encouraging as it helps temper the disappointment with the negligible 0.9% gain in Q3. The increase in Q4 is much stronger than the Bank of Canada`s projected increase of 3.3% contained in the January 2010 Monetary Policy Report. However, though it raises the probability of advancing a tightening in policy, there will likely need to be additional indications of this economic strength being sustained in 2010 before the central bank abandons its conditional commitment of maintaining the overnight rate at its current 0.25% through the end of the second quarter.
Read the full article here.
The latest Statistics Canada report on Canada`s gross domestic product showed the country`s economy grew by 5% on an annualized basis in the fourth quarter of 2009. Here`s what economists had to say about it:
Derek Holt and Karen Cordes, economists, Scotia Capital Inc.
Canada landed a fifteenth gold medal this morning with recovery evidence that exceeded expectations. This is further evidence in support of the risk the BoC goes in Q2 with a material bias shift in tomorrow`s statement that builds upon recent communications. The pace of the recovery is now materially stronger than the BoC`s expectations, and inflation is proving stickier than the BoC had anticipated. Sustainability into Q1 at these growth rates is questionable, but it`s difficult to still defend the need for emergency levels of monetary stimulus at the zero lower bound on rates if growth and inflation are exceeding expectations and funding concerns are all but gone. Not only did Q4 beat expectations, but December`s 0.6% m/m increase in real GDP was also much stronger than consensus expectations of 0.4% m/m and slightly faster than our own estimate of 0.5% m/m.
Paul Ferley, assistant chief economist, RBC Economics Research
The strong rise at the end of the fourth quarter suggests strong momentum going into the first quarter of this year. The robust jump in Q4 GDP growth is encouraging as it helps temper the disappointment with the negligible 0.9% gain in Q3. The increase in Q4 is much stronger than the Bank of Canada`s projected increase of 3.3% contained in the January 2010 Monetary Policy Report. However, though it raises the probability of advancing a tightening in policy, there will likely need to be additional indications of this economic strength being sustained in 2010 before the central bank abandons its conditional commitment of maintaining the overnight rate at its current 0.25% through the end of the second quarter.
Read the full article here.
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Canada`s economic recovery picks up speed
OTTAWA -- Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by 4% in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3% growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures," the federal agency said. "Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
On a monthly basis, the gross domestic product was up 0.6% in December -- a fourth consecutive monthly advance. Most economists had forecasts growth of 0.4% during the month.
Read the full article here.
OTTAWA -- Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by 4% in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3% growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures," the federal agency said. "Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
On a monthly basis, the gross domestic product was up 0.6% in December -- a fourth consecutive monthly advance. Most economists had forecasts growth of 0.4% during the month.
Read the full article here.
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Pressure grows for Bank of Canada to hike rates
OTTAWA -- Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after data on fourth-quarter gross domestic product suggested the economy is roaring its way out of recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change Tuesday morning when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25% until July in an effort to pump up economic growth after the great recession.
Data from Statistics Canada suggest the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded 5% in the final three months of 2009, blasting past market expectations for a 4% gain — and the bank’s own 3.3% forecast — and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9% as opposed to the original 0.4% reading.
Read the full article here.
OTTAWA -- Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after data on fourth-quarter gross domestic product suggested the economy is roaring its way out of recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change Tuesday morning when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25% until July in an effort to pump up economic growth after the great recession.
Data from Statistics Canada suggest the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded 5% in the final three months of 2009, blasting past market expectations for a 4% gain — and the bank’s own 3.3% forecast — and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9% as opposed to the original 0.4% reading.
Read the full article here.
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Rise in Housing Starts will keep lid on prices in 2010: CMHC
OTTAWA -- Housing starts will rise in 2010, putting a lid on home prices this year following their 19 per cent surge in 2009, the Canada Mortgage and Housing Corporation said Tuesday.
Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 units last year, the national housing agency said.
Describing the current state of affairs as a sellers` market, CMHC said the relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010," CMHC said.
But it added that it expects prices to remain stable in 2010 around the Multiple Listing Service average reached in January this year of $328,537, as the new housing stock brings balance back to the market.
As well, tighter requirements for mortgage lending recently imposed by Ottawa as fears of a housing bubble mounted "will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home," said CMHC chief economist Bob Dugan.
Read the full article here.
OTTAWA -- Housing starts will rise in 2010, putting a lid on home prices this year following their 19 per cent surge in 2009, the Canada Mortgage and Housing Corporation said Tuesday.
Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 units last year, the national housing agency said.
Describing the current state of affairs as a sellers` market, CMHC said the relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010," CMHC said.
But it added that it expects prices to remain stable in 2010 around the Multiple Listing Service average reached in January this year of $328,537, as the new housing stock brings balance back to the market.
As well, tighter requirements for mortgage lending recently imposed by Ottawa as fears of a housing bubble mounted "will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home," said CMHC chief economist Bob Dugan.
Read the full article here.
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Canadian Dollar`s spike likely short-lived: Analyst
OTTAWA — The Canadian dollar`s early-week spike may be short-lived, as the Bank of Canada will not signal Tuesday it will hike interest rates before its tentative July target, says TD Securities chief currency strategist Shaun Osborne.
Nevertheless, Canada`s surprisingly strong growth in the fourth quarter and its relative budgetary strength is likely to keep the loonie well bid in the months ahead, analysts said.
The loonie gained a full cent on Monday to close at 96.01 US cents after Statistics Canada released data showing the economy growing at a five per cent clip in the fourth quarter, far surpassing expectations of a four per cent gain.
The GDP figures fuelled speculation the Bank of Canada will raise rates more quickly than expected to contain growth and to lift the cost of credit form current emergency levels of 0.25 per cent.
"The Canadian dollar has been trading in a fairly wide but consistent range of 92 to 98 cents US since last October," said Osborne.
Read the full article here.
OTTAWA — The Canadian dollar`s early-week spike may be short-lived, as the Bank of Canada will not signal Tuesday it will hike interest rates before its tentative July target, says TD Securities chief currency strategist Shaun Osborne.
Nevertheless, Canada`s surprisingly strong growth in the fourth quarter and its relative budgetary strength is likely to keep the loonie well bid in the months ahead, analysts said.
The loonie gained a full cent on Monday to close at 96.01 US cents after Statistics Canada released data showing the economy growing at a five per cent clip in the fourth quarter, far surpassing expectations of a four per cent gain.
The GDP figures fuelled speculation the Bank of Canada will raise rates more quickly than expected to contain growth and to lift the cost of credit form current emergency levels of 0.25 per cent.
"The Canadian dollar has been trading in a fairly wide but consistent range of 92 to 98 cents US since last October," said Osborne.
Read the full article here.
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Low interest did its job, data show
Pressure on the Bank of Canada to move early on raising interest rates mounted yesterday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at earliest July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four per cent gain - and the central bank`s own 3.3 per cent forecast - and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000.
Read the full article here.
Pressure on the Bank of Canada to move early on raising interest rates mounted yesterday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at earliest July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four per cent gain - and the central bank`s own 3.3 per cent forecast - and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000.
Read the full article here.
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Will GDP spur rate hike?
Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at earliest July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four per cent gain -- and the central bank`s own 3.3 per cent forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data was solid almost across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9 per cent as opposed to the original 0.4 per cent reading.
Read the full article here.
Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on interest rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at earliest July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four per cent gain -- and the central bank`s own 3.3 per cent forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data was solid almost across the board, with personal consumption and net trade contributing to the performance.
Third-quarter data were also revised upward, with growth of 0.9 per cent as opposed to the original 0.4 per cent reading.
Read the full article here.
- Joined
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Canada`s economy surges ahead in fourth quarter
OTTAWA — Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by four per cent in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3 per cent growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures," the federal agency said.
"Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
Read the full article here.
OTTAWA — Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by four per cent in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3 per cent growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures, and investment in residential structures," the federal agency said.
"Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
Read the full article here.
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Consumer confidence up, but job loss is concern
Canadian consumers were more positive about the economy in February, as RBC`s Canadian Consumer Outlook Index rose to 109 from 106 in January, according to the survey released Monday.
When asked about the overall state of the economy in February, 53 per cent of Canadians said it was good while 47 per cent described it as bad. That was up slightly from January, when 52 per cent described the Canadian economy as bad and 48 per cent described it as good.
However, 25 per cent of respondents said a member of their household is worried about losing their job or being laid off, down slightly from 26 per cent in January. The highest level of job anxiety was in Ontario, which was up five percentage points to 30 per cent, and in Atlantic Canada, which was up six points to 24 per cent.
"We know 21 per cent of Canadians are planning `staycations` this month, primarily for financial reasons. The continuing high levels of concern about job loss are likely a factor in those financial reasons," said David McKay, group head of Canadian Banking at RBC.
Also, the percentage of Canadians who think their personal financial situation will improve in the next three months fell to 30 per cent in February from 32 per cent the month before.
Read the full article here.
Canadian consumers were more positive about the economy in February, as RBC`s Canadian Consumer Outlook Index rose to 109 from 106 in January, according to the survey released Monday.
When asked about the overall state of the economy in February, 53 per cent of Canadians said it was good while 47 per cent described it as bad. That was up slightly from January, when 52 per cent described the Canadian economy as bad and 48 per cent described it as good.
However, 25 per cent of respondents said a member of their household is worried about losing their job or being laid off, down slightly from 26 per cent in January. The highest level of job anxiety was in Ontario, which was up five percentage points to 30 per cent, and in Atlantic Canada, which was up six points to 24 per cent.
"We know 21 per cent of Canadians are planning `staycations` this month, primarily for financial reasons. The continuing high levels of concern about job loss are likely a factor in those financial reasons," said David McKay, group head of Canadian Banking at RBC.
Also, the percentage of Canadians who think their personal financial situation will improve in the next three months fell to 30 per cent in February from 32 per cent the month before.
Read the full article here.
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Bank of Canada holds rate, but eyes inflation
OTTAWA -- The Bank of Canada reiterated on Tuesday its conditional pledge to keep its key-lending rate at a record low until July, but took a more hawkish view on inflation by indicating the risks to its outlook are "roughly balanced" as opposed to tilted to the downside.
That was the one significant change in its scheduled interest-rate announcement, and analysts might interpret this as a first step by the central bank to ready markets for an interest-rate hike.
"The Bank of Canada is now walking not crawling towards the exit," said Kathy Lien, director of currency research at fx.360.com, following the release of the statement.
"Change is afoot. Evolutionary change, but change nonetheless," added Stewart Hall, economist at HSBC Securities Canada.
Markets reacted accordingly, sending the Canadian dollar up sharply, over 80 basis points to US96.83 as of trading at 9:30 am ET.
Read the full article here.
OTTAWA -- The Bank of Canada reiterated on Tuesday its conditional pledge to keep its key-lending rate at a record low until July, but took a more hawkish view on inflation by indicating the risks to its outlook are "roughly balanced" as opposed to tilted to the downside.
That was the one significant change in its scheduled interest-rate announcement, and analysts might interpret this as a first step by the central bank to ready markets for an interest-rate hike.
"The Bank of Canada is now walking not crawling towards the exit," said Kathy Lien, director of currency research at fx.360.com, following the release of the statement.
"Change is afoot. Evolutionary change, but change nonetheless," added Stewart Hall, economist at HSBC Securities Canada.
Markets reacted accordingly, sending the Canadian dollar up sharply, over 80 basis points to US96.83 as of trading at 9:30 am ET.
Read the full article here.
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Bank under pressure to hike rates
Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at least July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four-per-cent gain -- and the central bank`s 3.3 per cent forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid almost across the board, with personal consumption and net trade contributing to the performance. Third-quarter data were also revised upward, with growth of 0.9 per cent as opposed to the original 0.4-per-cent reading.
This comes on top of January inflation data that indicated price increases had moved closer to the central bank`s two-per-cent target earlier than anticipated.
Read the full article here.
Pressure on the Bank of Canada to move early on raising interest rates mounted Monday after fourth-quarter data on gross domestic product suggested the economy is roaring its way out of the recession after recording the fastest pace of growth in nearly a decade.
The central bank could provide hints of a change today when it releases its latest statement on rates. Its plan for almost a year has been to conditionally keep its benchmark rate at 0.25 per cent until at least July in an effort to pump up economic growth after the recession.
Data from Statistics Canada suggested the emergency-level rates have worked their magic, perhaps faster and better than anticipated.
The economy expanded five per cent in the final three months of 2009, blasting past market expectations for a four-per-cent gain -- and the central bank`s 3.3 per cent forecast -- and setting the stage for robust growth this quarter. It is also the fastest pace of quarterly economic growth since late 2000. Further, the data were solid almost across the board, with personal consumption and net trade contributing to the performance. Third-quarter data were also revised upward, with growth of 0.9 per cent as opposed to the original 0.4-per-cent reading.
This comes on top of January inflation data that indicated price increases had moved closer to the central bank`s two-per-cent target earlier than anticipated.
Read the full article here.
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- Mar 24, 2009
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Doomed to be wrong
`Yes, sir, we`ve just had our 70 fat years in America, thanks to the Greatest Generation and the bounty of freedom and prosperity they built for us," New York Times columnist Thomas Friedman wrote last week. But it`s over. "Welcome to the lean years."
He may be right. I don`t know. But I do know that Friedman is far from the first big-name pundit to confidently proclaim the dawning of a new, dismal era. For the better part of the last year I`ve been writing a book about expert forecasts and much of that work consisted of going through archives and digging up old predictions. Two conclusions emerged with overwhelming clarity.
First, there are always very smart people with impressive credentials telling people we are going to hell in a hand basket. And second, very smart people with impressive credentials are lousy at predicting the future.
Friedman is terrified by the state of American finances. And rightly so. I am too. But it`s instructive to recall that the imminent bankruptcy of the American government was a recurring theme all through the 1970s and 1980s. And it was a mere 18 years ago that a book called Bankruptcy 1995 --the title says it all -- spent months on the New York Times bestseller list, solidifying a widespread belief that the point of no return on debt had been passed, or soon would be if the government didn`t make savage cuts.
But there were no savage cuts and the point of no return was not passed. In fact, by the mid-1990s, the American government had erased its deficit. By the late 1990s, it was racking up the biggest surpluses in history and the hot issue of the presidential election of 2000 was -- anyone remember? -- how to spend all that cash. A pundit who predicted that a decade earlier would have been medicated and put in a rubber room.
Read the full article here.
`Yes, sir, we`ve just had our 70 fat years in America, thanks to the Greatest Generation and the bounty of freedom and prosperity they built for us," New York Times columnist Thomas Friedman wrote last week. But it`s over. "Welcome to the lean years."
He may be right. I don`t know. But I do know that Friedman is far from the first big-name pundit to confidently proclaim the dawning of a new, dismal era. For the better part of the last year I`ve been writing a book about expert forecasts and much of that work consisted of going through archives and digging up old predictions. Two conclusions emerged with overwhelming clarity.
First, there are always very smart people with impressive credentials telling people we are going to hell in a hand basket. And second, very smart people with impressive credentials are lousy at predicting the future.
Friedman is terrified by the state of American finances. And rightly so. I am too. But it`s instructive to recall that the imminent bankruptcy of the American government was a recurring theme all through the 1970s and 1980s. And it was a mere 18 years ago that a book called Bankruptcy 1995 --the title says it all -- spent months on the New York Times bestseller list, solidifying a widespread belief that the point of no return on debt had been passed, or soon would be if the government didn`t make savage cuts.
But there were no savage cuts and the point of no return was not passed. In fact, by the mid-1990s, the American government had erased its deficit. By the late 1990s, it was racking up the biggest surpluses in history and the hot issue of the presidential election of 2000 was -- anyone remember? -- how to spend all that cash. A pundit who predicted that a decade earlier would have been medicated and put in a rubber room.
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Economy surges with 5% growth in fourth quarter
Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by four per cent in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3 per cent growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures and investment in residential structures," the federal agency said.
"Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
Read the full article here.
Canada`s economic recovery picked up speed in the final quarter of last year, growing by a better-than-expected five per cent and putting pressure on the Bank of Canada to begin raising lending rates sooner than planned to keep a lid on inflation.
The growth was fuelled by a jump in consumer spending, a strengthening housing market and increased exports, Statistics Canada reported Monday.
Economists had expected expansion to accelerate by four per cent in the last three months of the year. The fourth-quarter results also beat the Bank of Canada`s estimate of 3.3 per cent growth.
"For a third consecutive quarter, growth in final domestic demand was led by increases in personal expenditures, government expenditures and investment in residential structures," the federal agency said.
"Export and import volumes both rose for a second consecutive quarter, with growth in exports outpacing that of imports in the fourth quarter."
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Rise in housing starts will keep lid on prices in 2010: CMHC
OTTAWA -- Housing starts will rise in 2010, putting a lid on home prices this year following their 19 per cent surge in 2009, the Canada Mortgage and Housing Corporation said Tuesday.
Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 units last year, the national housing agency said.
Describing the current state of affairs as a sellers` market, CMHC said the relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010," CMHC said.
But it added that it expects prices to remain stable in 2010 around the Multiple Listing Service average reached in January this year of $328,537, as the new housing stock brings balance back to the market.
As well, tighter requirements for mortgage lending recently imposed by Ottawa as fears of a housing bubble mounted "will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home," said CMHC chief economist Bob Dugan.
Read the full article here.
OTTAWA -- Housing starts will rise in 2010, putting a lid on home prices this year following their 19 per cent surge in 2009, the Canada Mortgage and Housing Corporation said Tuesday.
Between 152,000 to 189,300 housing starts are expected in 2010, up from 149,081 units last year, the national housing agency said.
Describing the current state of affairs as a sellers` market, CMHC said the relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010," CMHC said.
But it added that it expects prices to remain stable in 2010 around the Multiple Listing Service average reached in January this year of $328,537, as the new housing stock brings balance back to the market.
As well, tighter requirements for mortgage lending recently imposed by Ottawa as fears of a housing bubble mounted "will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home," said CMHC chief economist Bob Dugan.
Read the full article here.
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Shoes may not be done dropping in Ottawa`s mortgage reform
More than a decade ago, my late mother`s house was one of six in central Alberta bought by an Ontario woman in her 60s, who paid the minimum down payment on each one.
And in recent years, people in their 20s have been asking for advice about buying condominium units to be rented out to others, using leverage almost exclusively through various loans and lines of credit set up by developers.
So the new mortgage regulations announced by federal finance minister Jim Flaherty, to take effect April 19, were needed to cool a gurgling Canadian housing market before it becomes a bubble.
They will improve the likelihood that homebuyers will be able to keep up payments when our record-low interest rates rise an expected three per cent within the next two years, and will make it tougher for speculators to drive house prices beyond the affordability of first-time home buyers in particular.
One change is that mortgage loans will be income-tested against the five-year posted interest rate, as opposed to the three-year rate currently used.
Read the full article here.
More than a decade ago, my late mother`s house was one of six in central Alberta bought by an Ontario woman in her 60s, who paid the minimum down payment on each one.
And in recent years, people in their 20s have been asking for advice about buying condominium units to be rented out to others, using leverage almost exclusively through various loans and lines of credit set up by developers.
So the new mortgage regulations announced by federal finance minister Jim Flaherty, to take effect April 19, were needed to cool a gurgling Canadian housing market before it becomes a bubble.
They will improve the likelihood that homebuyers will be able to keep up payments when our record-low interest rates rise an expected three per cent within the next two years, and will make it tougher for speculators to drive house prices beyond the affordability of first-time home buyers in particular.
One change is that mortgage loans will be income-tested against the five-year posted interest rate, as opposed to the three-year rate currently used.
Read the full article here.
- Joined
- Mar 24, 2009
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Inflation set to rise faster than expected
The Bank of Canada
is on heightened alert for inflation and a stronger recovery than it had bargained for.
The central bank continues to hold interest rates
at historic lows but is signalling to markets that inflation is running slightly higher and the economy, driven by "vigorous domestic spending" and a gradual recovery in exports, is expanding somewhat faster than it had projected, a juggling act for Governor Mark Carney.
Mr. Carney and his fellow policy makers at the Bank of Canada are now under more pressure in terms of how they time the first interest-rate hike after a lengthy run at near zero, economists say, and the next reading of inflation, due March 19, could be crucial to their thinking.
The economy grew in the fourth quarter at a 5-per-cent annualized pace, according to fresh data from Statistics Canada this week, while the Bank of Canada`s favoured measure of consumer prices - so-called core inflation, which strips out volatile items such as fuel - is at 2 per cent. The central bank targets 2-per-cent overall inflation; the core reading helps guide monetary policy, and it was initially not projected to reach that level until the second half of next year.
The Bank of Canada kept its benchmark overnight rate at 0.25 per cent yesterday, and promised again to hold it there through the end of June depending on the outlook for inflation. A second month of faster-than-expected price gains would increase the stakes as Mr. Carney approaches the point where he will lay out how the central bank plans to begin returning rates to pre-crisis levels. He has already sent a message of sorts, warning late last year that Canadians should not take on more debt than they can handle when borrowing costs rise
Read the full article here.
The Bank of Canada
is on heightened alert for inflation and a stronger recovery than it had bargained for.The central bank continues to hold interest rates
at historic lows but is signalling to markets that inflation is running slightly higher and the economy, driven by "vigorous domestic spending" and a gradual recovery in exports, is expanding somewhat faster than it had projected, a juggling act for Governor Mark Carney.Mr. Carney and his fellow policy makers at the Bank of Canada are now under more pressure in terms of how they time the first interest-rate hike after a lengthy run at near zero, economists say, and the next reading of inflation, due March 19, could be crucial to their thinking.
The economy grew in the fourth quarter at a 5-per-cent annualized pace, according to fresh data from Statistics Canada this week, while the Bank of Canada`s favoured measure of consumer prices - so-called core inflation, which strips out volatile items such as fuel - is at 2 per cent. The central bank targets 2-per-cent overall inflation; the core reading helps guide monetary policy, and it was initially not projected to reach that level until the second half of next year.
The Bank of Canada kept its benchmark overnight rate at 0.25 per cent yesterday, and promised again to hold it there through the end of June depending on the outlook for inflation. A second month of faster-than-expected price gains would increase the stakes as Mr. Carney approaches the point where he will lay out how the central bank plans to begin returning rates to pre-crisis levels. He has already sent a message of sorts, warning late last year that Canadians should not take on more debt than they can handle when borrowing costs rise
Read the full article here.