Gross Domestic Product, 2nd Quarter 2010 (Pub. August 31)
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Real gross domestic product grew by 0.5% in the second quarter of 2010, after growing 1.4% in the first quarter this year. On an annualized basis, Canadian GDP gained 2.0% in the second quarter, after advancing 5.8% in the first quarter. Annualized growth in the U.S. economy was 1.6% in the second quarter.
Goods-producing industries (1.9%) increased for a third straight quarter, while the services sector was up 0.1%. This marks the third consecutive quarter in which the output of the goods-producing industries has outpaced that of the services industries.
Manufacturing was up 1.3% from May and was 6.6% higher than in June of 2009. Construction increased 0.1% from May and grew 6.6% from June last year. Wholesale trade was unchanged from May and gained 6.8% from June of 2009, while retail gained 0.7% from May and 3.9% from June last year.
Consumer spending grew 0.7% in the second quarter from the first quarter, after a 1.0% gain in the first quarter. Spending on both durable and semi-durable goods fell. Expenditures on new and used motor vehicles declined 2.9%, and households spent less on electricity and natural gas for a second straight quarter. Spending on furniture, furnishings, and household equipment and maintenance was up 0.1%. Consumer purchases of services rose 1.2%, after growing by 0.7% in the first quarter.
Investments in residential structures advanced 0.3% in the second quarter, the slowest quarterly rate of increase since the first quarter of 2009. However, it was the fifth straight quarterly gain following five consecutive quarterly declines. Renovation activity was down 0.8%, following four consecutive quarters of growth. Ownership transfer costs related to housing resale activity declined for the second straight quarter, after recording large gains through most of 2009. Investments in new housing construction grew 6.9%, the third consecutive quarterly gain of over 6.0%.
Export volumes grew 1.5%, the fourth consecutive quarterly gain following five quarters of decline. The increase came mostly from automotive products (12.8%) and machinery and equipment (4.9%). Exports of services, notably commercial services, rose 1.5%. Import volumes grew 3.9% in the second quarter, the fourth straight quarterly gain. Increases in the imports of machinery and equipment and industrial goods and materials were the main contributors to the increase.
Businesses accumulated $13 billion of inventories in the second quarter following a $6 billion accumulation in the first quarter. Manufacturers' inventories increased for the first time since the fourth quarter of 2008. Inventories in both retail and wholesale trade also rose. The economy-wide stock-to-sales ratio was unchanged from the first quarter. Businesses held inventories equivalent to 65 days of sales.
Corporate profits fell 1.0%, after growing for three consecutive quarters.
Personal disposable income rose 3.6%, up from 0.7% in the first quarter.
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