Cameron Spencer
The Canadian economy expanded at a slower pace than the U.S. economy in the fourth quarter of 2009, but some economists have decided to hand the gold medal to Canada anyway. Stephen Gordon, an economics professor at Laval University, noted that the underlying components to the Canadian numbers were far stronger (hat tip: Abnormal Returns, Mark Thoma).
The U.S economy expanded at an annualized rate of 5.9 per cent, while the Canadian economy expanded at a rate of 5 per cent. However, without the contribution of inventories, the U.S. economy would have grown just 2 per cent. In Canada, where inventories detracted from growth, the Canadian economy would have grown 5.8 per cent.
"It's easy to see why the Canadian numbers were greeted with more enthusiasm than were those in the US, even though the headline number was smaller," Mr. Gordon said on his blog, Worthwhile Canadian Initiative. "Growth was evenly distributed across all types of expenditures, and we can expect inventories to bounce back as well fairly soon."