HIGHLIGHTS OF THE WEEK – Mar. 3/14

United States

• The U.S. economy grew by 2.4% in the fourth quarter according to the BEA’s second estimate, slower than the original estimate of 3.2%.
• The details of the report remained positive. Economic growth was led by consumer spending and busi­ness investment, but slowed by a decline in government spending, which subtracted a full percentage point from headline growth.
• While poor weather has made interpreting the economic tea leaves increasingly difficult, the case for improved growth is still in place. Diminished fiscal drag, improved household finances and rebounding investment should lead to faster growth over the remainder of 2014.

Canada

• The Canadian economy grew by 2.9% annualized in the fourth quarter of 2014, led by consumer spending and inventory accumulation.
• Canada’s current account deteriorated in the fourth quarter. However, that was largely due to a sharp decline in export prices. In real terms, net trade contributed positively to economic growth.
• Extreme weather is likely to temper momentum in Canadian real GDP through the first quarter of 2014. However, warmer weather, a stronger U.S. economy, low consumer borrowing rates and an improved corporate profit environment will help drive a pick up in the spring.