The Royal bank of Canada is one of the best sources of information when we are trying to understand the international, National and the local Okanagan, Shuswap Real Estate markets. The following is an excerpt from a very long report on the US economy that sums it up quite well.
US economy bumping along
The US economy slowed in the second quarter with the 1.5% gain notably below the average 2.2% quarterly increase recorded since the recession trough. Annual benchmark revisions to the data netted out to show the level of GDP as of the first quarter of 2012 a modest 0.1% higher than the previously reported level with bigger gains in the fourth quarter of 2011 and first quarter of 2012. Still, this was only enough to offset the slower than expected rise in second-quarter GDP and downward revisions to our growth forecast for the second half of the year. As a result, we still forecast growth of 2.2% in 2012. We trimmed our 2013 forecast to 2.3% from 2.6% as the effect of the drought affects growth in the first half of next year, and uncertainty about the effect of US fiscal policy and the European debt situation weighs on US household and business confidence.
Strength in unexpected places...
Details of the second-quarter 2012 GDP report showed continued improvement in residential investment as spending rose for the fifth consecutive quarter after falling for the better part of the previous six years. This suggests to us that one of the major drags on GDP growth in recent years is easing. The tentative deal reached by the US Congress to fund government activities through March 2013 will ensure that there will not be government shutdowns thereby avoiding one of the near-term problems overhanging the US economy. This small, but important, development along with easy financial conditions will prevent a sharp slowing in US growth in the second half of this year.