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North America Weekly

Parsing U.S. Q4 GDP; Rate Hikes Unlikely for Canada

EXECUTIVE SUMMARY

The 3.2% headline growth rate in Q4 2010 GDP was very much in line with RGE's forecast of 3.1%, but the details of the components were slightly different. While the details of the report are likely to be revised, it is undeniable that the economy gained some momentum in Q4 2010, with final demand swinging up to 7.2% from 0.9% in Q3. We upgrade slightly our forecast for U.S. GDP growth in 2011 to 3%. This pace of growth will leave us with an unemployment rate of 9% by the end of 2011 and an inflation rate well below the Fed’s comfort zone. Next week, watch the ISM[...]

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