The world’s leading economic indicators have gained even more momentum. Their expansion signal is now stronger than at any point in the previous economic cycle, and we are upgrading our forecast accordingly. We now expect above-trend growth next year.
Despite job losses, struggling consumer confidence and the end of cash for clunkers, U.S. consumer spending is likely to expand at about 2% annualized in the fourth quarter, reflecting considerable consumer resilience in the circumstances. We increased our forecast to 3.4% real GDP growth in 2010.
In Canada, despite months of disappointing GDP growth, the news on domestic demand remains good. Growth is accelerating in both homebuilding and consumer spending. The latter will be buoyed by strength in the aggregate wage bill.
