U.S. Economy

US real GDP grew at a very healthy 3.5 per cent annual rate in the third quarter, following even more robust growth of 4.6 per cent in the second quarter.  Growth was led higher by strong consumer spending, exports, fixed investment and government spending.

Growth in the US economy has been sharply higher over the past six months, averaging over 4 per cent at an annual rate.  While inflation remains muted, the US labour market is picking-up and  job growth has been trending higher. The US Federal Reserve announced the end of its quantitative easing program yesterday, and while it noted that interest rates would not rise for a considerable time, a continuation of strong growth likely means the Fed will act on rates as early as mid-2015. If so, long-term rates in both the US and Canada should rise from current lows, bringing mortgage rates with them.

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