"Good News Where You Least Expect It"
Several Fridays ago we highlighted Canada’s resilience to the recession and the relative strength of its recovery. Though the expansion has slowed recently, the Canadian economy continues to plow ahead with second quarter GDP growth of 2.0 percent and employment up by 396,300, or 2.4 percent, over the 12 months ending in August. The much larger U.S. economy gained 229,000 payroll jobs during this period, an increase of 0.3 percent.
Looking southward, could there be any good news in Mexico despite the drug-related gang violence? There is. Without much fanfare, the Mexican economy has become more competitive with China for manufacturers shipping to the U.S. as reported in a recent article by Bloomberg. Cessna, Whirlpool Corp., Polaris Industries and Intel are among the multi-national companies recently expanding or announcing expansions in the country. The Mexican government last month raised its forecast of 2010 GDP to 4.5 percent on the strength of exports to the U.S., its largest trading partner. The government expects growth in 2011 of 3.8 percent.
Back here in the U.S., personal income growth accelerated to 0.5 percent in August, the largest increase this year, which helped propel a solid 0.4 percent increase in spending by individuals. The stock market completed its best September since 1939 as the Standard & Poor's 500 index rose 9 percent, the Dow rose 8 percent and the NASDAQ composite index gained 12 percent.
The U.S. and global economies face daunting challenges, but the latest batch of data puts the chances of a double-dip recession further in the rearview mirror.