US Real GDP Growth – January 30, 2014
The BEA’s preliminary estimate of Q4 US GDP came in at 3.2 per cent, modestly higher than consensus expectations of 3.1 per cent and a deceleration from Q3’s 4.1 per cent growth. The details of the report were overwhelmingly positive with personal consumption, exports and business investment all making healthy contributions to growth. In fact, GDP would have grown by over 4 per cent in the fourth quarter were it not for a contraction in US government spending. For all of 2013, the US economy grew at a somewhat disappointing 1.9 per cent rate, though showed significant momentum in the second half of the year with quarterly growth averaging 3.7 per cent. It is worth noting that today’s release is a preliminary estimate and will be revised in subsequent months.
Bond markets have thus far shrugged off further Fed tapering announced at yesterday’s US Federal Reserve meeting as well as today’s positive news regarding economic growth. Interest rates in the US are modestly higher this morning while the yield on 5-year Government of Canada bonds, the key benchmark rate for 5-year mortgages, have remained relatively unchanged at less than 1.6 per cent.
Copyright British Columbia Real Estate Association. Reprinted with permission. BCREA makes no guarantees as to the accuracy or completeness of this information.