1Finance

US and Canadian GDP data, US Durable Goods Orders and Unemployment claims are the final highlights before Christmas break. Here is an outlook on these major events.

Last week the Federal Reserve hiked interest rates for the first time in nearly a decade showing faith in the U.S. economy. The central bank raised interest rates by a quarter of a percentage point to between 0.25% and 0.50. Policy makers reiterated that the US economy is performing well and is expected to improve further. The labor market advanced considerably reaching an unemployment rate of 5%. Furthermore, inflation is expected to rise over the medium term towards the 2 % target. Fed officials declared that the rate hike was the beginning of a “gradual” tightening cycle.

1. US Final GDP: Tuesday, 13:30. The US economy advanced more than previously estimated in the second quarter. Data showed the world’s biggest economy expanded at an annual pace of 3.9% between April and June, while economists expected GDP to stay unchanged at 3.7%. This was a welcome change from the sluggish 0.6% growth recorded in the first quarter of 2015. Economists expect GDP to rise 1.9% in the third quarter.
2. Canadian GDP: Wednesday, 13:30. Canada’s economy broke a three-month winning streak in September with a 0.5% GDP contraction. The energy sector weighed on output with a 5.5% decline in oil prices, raising concerns over growth in the last quarter of 2015. There were also declines in manufacturing, wholesale trade. Nevertheless, Canadian economy expanded in the third quarter posting a 2.3% growth rate on an annualized basis, following two straight quarters of contraction. However, economists do not expect such strong growth in the fourth quarter.
3. US Durable Goods Orders: Wednesday, 13:30. Orders for long-lasting products registered solid gain of 3.0% in October following two months of declines. Business investment was the major contributor with a 1.3% rise. Demand for commercial aircraft also increased. Meanwhile, core orders excluding transportation items rose by seasonally adjusted 0.5% in October, beating forecasts for a 0.3% increase. Durable orders are expected to decline 0.6%. while Core orders are predicted to rise 0.1%.
4. US Unemployment Claims: Thursday, 13:30. The number of Americans filing new claims for unemployment benefits fell last week from a five-month high of 282,000 to 271,000, suggesting continued improvement in the US labor market. It was the 41st straight week that claims remained below 300,000. This reading backs the Fed rate hike decision made a day earlier. While claims tend to be volatile around the holiday session, the trend continued to point to a robust employment conditions. The four-week moving average of claims slipped 250 to 270,500 last week. The number of jobless claims is expected to reach 270,000 this week.

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