AUS
NZ
UK
CA
USA
IND
Real gross domestic product (GDP) saw an increase of 0.4% in the first quarter of 2024, rebounding from no change in the previous quarter, which had been revised down from an initial estimate of 0.2%. The primary driver behind this growth was a significant rise in household spending on services, although slower inventory accumulations tempered the overall economic expansion.
Household Spending on Services Rises
Household spending increased by 0.7% in Q1 2024, with a notable 1.1% rise in spending on services. This surge was largely fueled by higher expenditures on telecommunications services, rent, and air transport. Additionally, reduced spending by non-residents in Canada contributed to the overall increase in household expenditures.
Little Change in Net Trade
Exports of goods and services rose by 0.5% in the first quarter, following a 0.8% increase in Q4 2023. The primary contributor to the increase in exports was unwrought gold, silver, and platinum group metals, with significant demand from the United Kingdom and Switzerland. However, the overall export growth was moderated by lower exports of passenger cars, light trucks, and crude oil and bitumen.
Imports of goods and services saw a slight increase of 0.4% in Q1 2024, following a 0.2% rise in the previous quarter.
Household Savings Reach Highest Rate Since Early 2022
The household savings rate climbed to 6.9% in the first quarter, the highest level since early 2022. This increase was driven by gains in disposable income (+1.8%) outpacing the rise in nominal consumption expenditure (+1.2%). The primary sources of income gains were wages and net investment income.
Corporate Incomes Decline
Corporate incomes fell by 4.9% in the first quarter of 2024, after experiencing a 2.4% rise in Q4 2023. The decline in corporate earnings reflects a challenging economic environment for businesses despite the overall increase in GDP.
Overall, the first quarter of 2024 demonstrated a positive shift in economic activity, with household spending on services playing a pivotal role in driving GDP growth. However, the decrease in corporate incomes and moderated net trade growth indicate ongoing challenges within the broader economic landscape.
