Canada GDP for Q4 annualized 2.6% versus 1.8% estimate

• Prior 1.0%
• GDP YoY annualized 2.6% vs 1.8% estimate
• GDP MoM 0.2% versus 0.3% estimate. Prior month -0.2%
• implicit price QoQ 0.9% versus 0.6% last quarter
• GDP YoY 2.36% vs 1.88% last (revised up from 1.49%)

The data points to much stronger growth as rates come down and household spending increased. Exports add which may be Trump related ahead of expected tariffs. US trade data today point to that trend.

The USDCAD has seen a dip (higer CAD) with the price moving to a low of 1.44407 after trading to key resistance area between 1.44487 to 1.4471 area earlier today and finding willing sellers. The broken 38.2% of the move down from the Feb high comes in at 1.43954 (High reached 1.4450 earlier today).

More Details:

Household spending up and leads the gains

• Q4 2024 Household Spending: +1.4%, strongest growth since Q2 2022.
• Key Q4 Drivers: New trucks, vans, SUVs; financial services; telecom services.
• 2024 vs. 2023 Household Spending: +2.4% (Goods: +1.6%, Services: +3.0%).
• Top 2024 Contributors: New vehicles, rent, telecom, financial services.

Residential construction grows at highest since Q1 of 2021

• Per Capita Spending: +1.0% in Q4 2024, -0.6% for full year 2024.
• Q4 2024 Residential Construction: +3.9%, strongest since Q1 2021.
• Key Q4 Drivers: Ownership transfer costs (+12.5%), new construction (+2.2%), alterations/improvements (+1.5%).
• Mortgage Growth: +1.3% in Q4, strongest quarter of the year.
• 2024 Annual Residential Construction: -1.1% (vs. -8.5% in 2023).
• Annual Breakdown: Ownership transfer costs +2.8%, alterations/improvements -4.7%, new construction +0.1%.

Business investment rises

• Q4 2024 Business Investment: +0.7%, led by building construction (+1.6%).
• Machinery & Equipment Investment: +4.2%, driven by industrial machinery, aircraft, and transportation equipment.
• Intellectual Property Investment: +0.6%, mainly from custom and own-account software.
• 2024 Annual Business Investment: -1.8%, led by building construction (-3.4%).
• Engineering Structures: -1.1%, impacted by Trans Mountain Expansion Project completion.
• Machinery & Equipment: -2.1% in 2024.
• Intellectual Property: -0.1% (Software +1.3%, R&D -2.3%, Mineral Exploration -4.2%).

GDP Deflator

• Q4 2024: +0.9%, driven by higher energy export prices.
• Household Consumption Prices: +0.7% in Q4.
• Government Consumption Prices: +0.9% in Q4.
• 2024 Annual GDP Deflator: +3.0% (vs. +1.4% in 2023).
• Key 2024 Drivers: Export prices +1.2% (vs. -3.7% in 2023), household consumption prices +2.7%.

Wage Growth

• Q4 2024 Compensation of Employees: +1.0% (vs. +1.7% in Q3).
• Key Q4 Drivers: Growth in services, decline in transportation/storage due to Canada Post strike.
• Regional Wage Growth: Highest in Nunavut/NWT (+2.9%), lowest in Manitoba (+0.1%), PEI (+0.2%), BC (+0.2%).
• 2024 Annual Compensation Growth: +5.9%, slowest since 2020.
• Education Sector Wages: +13.8%, boosted by retroactive payments and collective bargaining agreements.

This article was written by Greg Michalowski at www.forexlive.com.