Canadian factories hummed, consumers bought more houses, governments spent more money, prices increased and the economy posted its best quarter of growth in more than 10 years.
The Canadian economy expanded at an annualized rate of 6.1% in the first quarter, surpassing analyst expectations and marking the best growth rate since 1999.
Economists had expected annualized GDP growth of 5.9% in the last quarter, up from 5% in last year's fourth quarter. The growth in the first quarter is the third straight quarter of economic expansion in Canada, coming on the heels of three consecutive quarters of contraction.
March growth came in at 0.6%, ahead of the 0.5% estimate.
New housing construction was a big factor in driving the strong Q1 number, jumping 11% in the quarter. Statistics Canada said mortgage borrowing by Canadian consumers was higher for the fourth straight quarter.
While government spending increased at a slower rate than in the past few quarters, it was still up 0.5% in the first quarter.
Businesses increased their spending on machinery and equipment, a "major contributor to the first quarter gain" according to the report, but still down 23% from the peak reached two years ago.
Still, after Monday's big jump, the Canadian economy is close to erasing all of the lost economic activity from the recession that followed 2008's global credit crisis.
Bay St. forecasters overwhelmingly expect the central bank to make its first interest-rate hike since lowering it to a record-low 0.25% in April 2009 to fight off the worldwide recession.
Out of 26 economists polled by Bloomberg, only two say the Bank of Canada will leave rates as they are, while the rest are anticipating a quarter-point increase to 0.5%.
All of the Canadian economic data have been consistently strong and surprising to the upside.
Job creation is in full swing, with a record 109,000 workers added to payrolls in April; consumers are buying up goods at a healthy pace, tax credits or not; corporate profits are rebounding to pre-recession levels; and inflation is creeping closer to the central bank's preferred 2% target.
The sterling fundamentals prompted the central bank last month to ditch its conditional commitment to keep its policy rate at a record low 0.25% until July, leading traders to price in a nearly 100% chance of a rate hike on June 1.
Related Stories
