Similar Canadian and U.S. Growth Trends

August 31, 2010

Canadian real GDP advanced 2.0% at a seasonally adjusted annualized rate (saar) in the second quarter and by 3.4% between 2Q09 and 2Q10.  These results, announced earlier today, resemble U.S. trends.  The compositions of Canadian and U.S. growth were less similar.  In the comparative table below, “Cons” is an abbreviation for personal consumption, “Govt” stands for government expenditures, “Res” is residential investment, and “Nonres” is short of nonresidential investment.

  2Q vs 1Q, SAAR 2Q10 vs 2Q09
  United States Canada United States Canada
GDP 1.6% 2.0% 3.0% 3.4%
Cons 2.0% 2.6% 1.7% 3.7%
Govt 4.3% 2.6% 0.7% 4.1%
Res 27.2% 1.2% 5.2% 14.1%
Nonres 17.6% 14.7% 5.3% 2.4%
Exports 9.1% 6.0% 14.1% 10.0%
Imports 32.4% 16.4% 17.2% 17.3%


In comparisons of the second to the first quarter, personal consumption enhanced the growth rate of real GDP by 1.4 percentage points (ppts) in the United States and 1.5 ppts in Canada.  Residential investment accounted for 0.6 ppts of GDP growth in the U.S. but just 0.1 ppt in Canada.  Non-residential business spending produced 1.5 ppts of annualized growth in each of the economies.  Public-sector spending was more influential in the United States with a 0.9 ppt contribution to growth versus 0.5 ppts in Canada.  Net exports exerted a huge drag in both places: 3.4 ppts in the United States and 2.9 ppts in Canada.  Changing inventories and the statistical discrepancy were responsible for 0.6 ppts in the United States and 1.4 ppts of Canadian growth.

The personal consumption price deflator advanced 1.9% on year in the United States but just 1.1% in Canada.

Economic growth in the United States and Canada exceeded Japan’s measly 0.4% annualized pace but fell short of the expansion rates in Britain, Germany and many emerging and developing economies.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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