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

US Dollar May Bounce on Q2 GDP Revision ADP Jobs Data

The result is a healthy upward revision from the government's initial estimate of 2.6 percent growth in the second quarter.

US second-quarter growth was revised upward to the fastest pace in two years on stronger household spending and a bigger gain in business investment, putting the economy on a stronger track, Commerce Department data showed Wednesday. This shattered market expectations for a 3.7% increase, according to economists at Royal Bank of Canada, and follows a 3.7% advance in the January-to-March period.

The improvement in second-quarter GDP was driven in large part by strong consumer activity, but increased business spending also helped.

The Canadian dollar surged more than 1 per cent against its US counterpart on Thursday after data showing the strongest economic growth rate in almost six years, boosting chances of another interest rate hike from the Bank of Canada. Thus, the right way to think about these data is probably to average the first two quarters of the year. Consumer spending have played their traditional role as the locomotive accelerating to 3.3 % from 1.9% in the previous quarter.

Better-than-expected June growth also suggested the economy could have more momentum than anticipated in the second half of the year. It marked the strongest quarter of growth since the first quarter of 2015.

In the year to June, Canada's economy grew 4.3 per cent, after growing 4.7 per cent the month before.


GDP growth exceeded 3% in four quarters on a year-over-year basis, though it never grew 3% over a calendar year.

Hitting the 3% mark for the first time in more than two years was notable because President Donald Trump has said he wants to lift annual economic growth above 3% in a sustained fashion by rolling back regulations, overhauling the tax code and enacting other policy changes.

However, history tells us that once rebuilding kicks in, the net impact of disasters on national GDP tends to be small and short-lived (even Katrina had no more than a fleeting effect on GDP growth), so we should still be on track for a solid economic performance through the rest of the year.

The economists expect that the hurricane Harvey, which is now hitting Texas and Louisiana, weighs in on the economic growth. Both forecasting firm Macroeconomic Advisers and the Federal Reserve Bank of Atlanta's GDPNow model were predicting a third-quarter growth rate of 3.4% ahead of Wednesday's report.

The housing sector was a drag on overall growth during the spring, largely offset by positive contributions to GDP growth from private inventories and net exports.

The government provides three estimates each quarter for GDP, the economy's total output of goods and services.

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