Most of Canada to receive emergency alert test today
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
Fuelled by vaccinations and government aid, the U.S. economy grew at a solid 6.5 per cent annual rate last quarter in another sign that the nation has achieved a sustained recovery from the pandemic recession. The total size of the economy has now surpassed its pre-pandemic level.
Thursday's report from the Commerce Department estimated that the nation's gross domestic product -- its total output of goods and services -- accelerated in the April-June quarter from an already robust 6.3 per cent annual growth rate in the first quarter of the year.
The latest figure fell well below the 8 per cent-plus annual growth rate that many economists had predicted for the second quarter. But the miss was due mainly to clogged supply chains related to the rapid reopening of the economy. Those bottlenecks exerted a larger-than-expected drag on companies' efforts to restock their shelves. The resulting slowdown in inventory rebuilding, in fact, subtracted 1.1 percentage points from last quarter's annual growth.
By contrast, consumer spending -- the main fuel of the U.S. economy -- surged for a second straight quarter, advancing at an 11.8 per cent annual rate. Spending on goods grew at an 11.6 per cent rate, and spending on services, from restaurant meals to airline tickets, expanded at a 12 per cent pace as vaccinations encouraged more Americans to shop, travel and eat out.
Companies, too, spent with confidence last quarter. Business investment surged at an 8 per cent annual rate in the April-June quarter, adding 1.1 percentage point to GDP.
With consumers and businesses expected to keep spending, many analysts expect the economy to grow at a robust pace of around 6.5 per cent for all of 2021, despite the supply shortages and the possibility of a resurgent coronavirus in the form of the highly contagious delta variant. That would amount to the strongest calendar-year growth since 1984.
Growth that strong would far exceed the 2 per cent to 3 per cent average annual rates of recent decades. And it would represent a striking bounce-back from the economy's 3.4 per cent contraction last year in the midst of the pandemic, the worst decline since the 1940s.
Underpinning the rapid recovery have been trillions in federal rescue money, ranging from stimulus checks to expanded unemployment benefits to small business aid to just-distributed child tax credit payments. And millions of affluent households have benefited from a vast increase in their wealth resulting from surging home equity and stock market gains.
"Consumers are going to continue to drive the economic train," said Mark Zandi, chief economist at Moody's Analytics. "There is a lot of excess savings, a lot of cash in people's checking accounts."
Jen Psaki, the White House press secretary, hailed the GDP report and called on Congress to go further by passing the administration's proposals to vastly expand the nation's infrastructure.
Overhanging the bright economic forecasts is the threat posed by the delta variant. The U.S. is now averaging more than 60,000 confirmed new cases a day, up from only about 12,000 a month ago. Should a surge in viral infections cause many consumers to hunker down again and pull back on spending, it would weaken the recovery.
For now, the economy is showing sustained strength. Last month, America's employers added 850,000 jobs, well above the average of the previous three months. And average hourly pay rose a solid 3.6 per cent compared with a year earlier, faster than the pre-pandemic annual pace.
Consumer confidence has reached its highest level since the pandemic struck in March 2020, a key reason why retail sales remain solid as Americans shift their spending back to services -- from restaurant meals and airline trips to entertainment events and shopping sprees.
The economy is also receiving substantial support from the Federal Reserve. On Wednesday, the Fed reaffirmed that it will maintain its key short-term interest rate at a record low near zero to keep short-term borrowing costs low. It will also continue to buy government-backed bonds to put downward pressure on long-term loan rates to encourage borrowing and spending.
The recovery, in fact, has been so rapid, with pent-up demand from consumers driving growth after a year of lockdowns, that one looming risk is a potential spike in inflation that could get out of control. Consumer prices jumped 5.4 per cent in June from a year ago, the sharpest spike in 13 years and the fourth straight month of sizable price jumps.
The measure of consumer inflation in the second-quarter GDP report showed an annual rise of 3.4 per cent for core inflation, which excludes food and energy. It was the fastest such jump since 1991.
In addition to the drag on GDP from weak inventory restocking, reflecting the supply chain problems, housing construction fell at a 9.8 per cent annual rate last quarter. This decline reflected, in part, the troubles home builders have had in obtaining lumber and other supplies.
Some economists have warned that by choosing not to begin withdrawing its extraordinary support for the economy, the Fed may end up responding too late and too aggressively to high inflation by quickly jacking up rates and perhaps causing another recession.
But at a news conference Wednesday, Fed Chair Jerome Powell underscored his belief that recent inflation readings reflect price spikes in a narrow range of categories -- from used cars and airline tickets to hotel rooms and auto rentals -- that have been distorted by temporary supply shortages related to the economy's swift reopening. Those shortages involve items like furniture, appliances, clothing and computer chips, among others.
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
Prince Harry, the Duke of Sussex, has made headlines with his recent arrival in the U.K., this time to celebrate all things Invictus. But upon the prince landing in the U.K., we have already had confirmation that King Charles III won't have time to see his youngest son during his brief visit.
An Ontario man found out that a line of credit he thought was insured actually isn't after his wife of 50 years died.
After more than a century, Boy Scouts of America is rebranding as Scouting America, another major shakeup for an organization that once proudly resisted change.
The trial of a man who admits he killed four women in Winnipeg is set to begin Wednesday, and a law professor says lawyers for Jeremy Skibicki have multiple hurdles to clear for a defence of mental illness.
A first-of-its-kind Canadian research study is working towards a major medical breakthrough for a brain disorder, believed to be caused by repeated head injuries, that can only be detected after death.
In March, Indonesian officials and local fishermen rescued 75 people from the overturned hull of a boat off the coast of Indonesia. Until now, little was known about why the boat capsized.
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
An Ontario woman said it would have been impossible to buy a house without her mother – an anecdote that animates the fact that over 17 per cent of Canadian homeowners born in the ‘90s own their property with their parents, according to a new report.
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
A P.E.I. lighthouse and a New Brunswick river are being honoured in a Canada Post series.
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Whether passionate about Poirot or hungry for Holmes, Winnipeg mystery obsessives have had a local haunt for over 30 years in which to search out their latest page-turners.
Eighty-two-year-old Susan Neufeldt and 90-year-old Ulrich Richter are no spring chickens, but their love blossomed over the weekend with their wedding at Pine View Manor just outside of Rosthern.
Alberta Ballet's double-bill production of 'Der Wolf' and 'The Rite of Spring' marks not only its final show of the season, but the last production for twin sisters Alexandra and Jennifer Gibson.
A mother goose and her goslings caused a bit of a traffic jam on a busy stretch of the Trans-Canada Highway near Vancouver Saturday.
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
Three men in Quebec from the same family have fathered more than 600 children.