Canada Q2 GDP rises on exports and household spending
The Canadian economy surged in Q2, smashing all market expectations, and recorded its best 12-month run in over a decade, securing G7 strongest performer this year.
Canada’s GDP rose at a +4.5% annualized rate in Q2, surpassing market expectations for a +3.7% increase.
Both exports and household spending were the main contributors toward the surprise performance.
The Q2 result likely cements the likelihood of at least one more rate increase from the Bank of Canada (BoC) in 2017. Governor Poloz in July raised its benchmark interest rate by +25 bps to +0.75%.
Fed’s Inflation Conundrum Continues
The Fed’s inflation conundrum shows no signs of letting up in today’s U.S personal-income report.
Today’s data shows that the Fed’s preferred measure of inflation, the price index for personal consumption expenditures, was up +0.1% in July m/m. The price index rose +1.4% in July y/y, matching the y/y index change for prices ex-food and energy.
Note: This July price reading marked the lowest level in nearly two-years – in February, the annual inflation rate was +2.2%, and while core prices were up +1.9% y/y.