Canadian economy sees best growth in almost 6 years in Q2

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Canada's gross domestic product, or the broadest measure of goods and services produced in an economy, rose at a 4.5% annualized rate in the second quarter to 1.85 trillion Canadian dollars ($1.47 trillion), Statistics Canada said Thursday.

Gross domestic product, a broad measure of the goods and services produced across the USA, rose at a seasonally and inflation-adjusted annual rate of 3% in the second quarter, the Commerce Department said Wednesday.

The U.S. dollar softened against a basket of currencies following lackluster U.S. economic data that failed to boost expectations for another Federal Reserve rate increase this year.

The more robust GDP reading reflected stronger consumer spending and business investment, offset in part by a steeper pullback in spending by state and local governments.

Combined with the 3.7 per cent expansion over the first three months of 2017, Statistics Canada said the country saw its strongest six-month start to a calendar year in 15 years.

Mark Zandi, chief economist at Moody's Analytics, said he expected growth for the current quarter of 2.9 percent and a 2.6 percent gain for the fourth quarter.

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Canadian government bond prices were mostly lower across the yield curve, with the two-year price down 7 Canadian cents to yield 1.275 per cent and the 10-year falling 13 Canadian cents to yield 1.851 per cent.

Indeed, families appeared to have room to both spend and save more, with the household savings rate rising a notch, to 4.6 per cent from 4.3 per cent in the first quarter.

According to Market Watch, the last time the USA saw two quarters of economic growth above 3 percent was in 2014.

In an economic news report, National Bank senior economist Krishen Rangasamy says the economy grew a stunning 4% annualized in the first half of the year.

That figure is up about half a percent from an earlier estimate for the second quarter.

At its halfway point, American GDP is up 2.1 percent which indicates two-tenths of a percentage point improvement from previous estimates.

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Corporate profits deteriorated in 2015 as falling oil prices squeezed the domestic energy industry and a strong dollar damped demand for USA exports.

Many economists had been forecasting growth in the current July-September quarter would be around 3 percent. As such, nominal GDP, which includes these impacts, rose a more modest 2.9 percent.

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".

Spending by governments, which had grown 0.7 percent in the initial estimate, was revised to a decline at a 0.3 percent rate.

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.

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