Housing weakness expected to be a drag on growth

Financial Post- Canada’s housing market helped lift the economy in the early part of the recovery but will now act as a drag on growth, with starts falling for two straight quarters and expected to continue to fall in the months ahead, economists say.

Canada Mortgage and Housing reported Friday housing starts declined 1.5 per cent in September from the previous month, bringing the seasonally adjusted annual rate to 186,400 units in September.

Analysts had called for a bigger drop in starts, to 179,000.

Starts have now fallen for four of the past five months, leading to two straight quarters of overcall declines.

"After helping to support the rebound in real GDP growth over the last year, residential investment is likely to be a drag on economic growth through the second half of this year," said Diana Petramala, an economist at TD Economics…

Housing weakness expected to be a drag on growth

Bank of Canada raises key overnight interest rate to .75%

National Post- The Bank of Canada raised its benchmark policy rate Tuesday to 0.75% even though it scaled back its growth outlook on the belief budget cutting among households and governments in advanced economies is expected to “temper” the pace of the global recovery.

GDP in Canada is now expected to expand 3.5% this year and 2.9% in 2011, the central bank said, compared to its previous outlook in April of 3.7% and 3.1% growth, respectively. However, business investment and trade are expected to make a larger contribution to Canadian growth, which up until now has relied heavily on a confident consumer…

Bank of Canada raises key overnight interest rate to .75%

Canada’s economy grows faster than expected

The Gazette- Canada’s economy grew at a faster pace than expected in the first quarter of 2010, led by consumer spending, Statistics Canada reported Monday.

Gross domestic product rose at an annualized pace of 6.1 per cent between January and March, the biggest jump since the last quarter of 1999. Growth in the fourth quarter of last year was 4.9 per cent.

Most economists had expected GDP growth of 5.8 per cent in the first three months of 2010.

"Residential investment increased for a fourth consecutive quarter, as did consumer spending on goods and services," Statistics Canada said. "Export and import volumes both rose for a third consecutive quarter, with growth in imports outpacing growth in exports in the first quarter…”

Canada’s economy grows faster than expected

Real estate market to slow sharply, central bank says

The Globe and Mail-Europe’s debt troubles are roiling financial markets this morning, but this time going well beyond Greece. Statistics from the EU and Britain are unsettling investors as they paint a picture of widening deficits and heighten fears of debt default. The data drove Greece’s borrowing costs to prohibitive levels as the yield on 10-year government paper spiked to 8.5 per cent.

Greece’s situation worsened later this morning as Moody’s Investors Service cut its rating for the country’s sovereign debt to A3, down one notch, and warned of a further downgrade given the “fractious mobilization of external assistance.” Moody’s said the government must restore confidence. That drove the euro down even further against the U.S. dollar.

The total budget deficit among the 16 countries that use the euro surged to 6.3 per cent of gross domestic product last year, from just 2 per cent in 2008. Not only is that the fattest deficit since the common currency was introduced, it’s well above the EU limit of 3 per cent. Total government debt now stands at almost 80 per cent of GDP, nearly 10 percentage points above where it was a year earlier…

Real estate market to slow sharply, central bank says – The Globe and Mail

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