Takeaways from the strong report

Canadian GDP grew at a 4.5% annualized pace in the second quarter, much stronger than economists were expecting. The jump in growth has raised the odds of a rate hike on September 6 to 41.0% from 27.5% a day ago.

Here is what economists wrote in the aftermath:

CIBC:

Our Q3 call is still for growth to be close to 2%, with export and inventories among the categories likely to weigh on that quarter's pace, and housing turnover remaining slower than it had been earlier in this cycle. The market seems convinced that the Bank of Canada will wait until October, but the September meeting is now more likely. Still, after a hike, with the Canadian dollar at lofty levels, the Bank will sit back and wait for the Fed to resume its own rate hike path, rather than fly solo and allow the currency to overshoot."

BMO:

Even the naysayers will struggle mightily to find fault in this rocksolid report. Growth was very well balanced in this quarter, easily riding over the start of a cooldown in housing, and the sturdy June figure suggests some of the momentum was maintained heading into Q3... We are nudging up our call on Canadian GDP growth yet again to 3.1% for the year and 2.5% for Q3 -- and would readily allow that there is upside risk. While still-low core inflation and a stronger Canadian dollar give the BOC room to be patient and deliberate (ie unlikely to move next week), we do believe that the suite of robust numbers all but locks in another rate hike this year.

RBC:

Sustained above potential growth provides a strong argument for the Bank of Canada to continue to withdraw the current monetary policy stimulus and will be a key discussion point at the central bank's policy meeting next week. However we lean towards the expected moderation in Q2 growth along with inflation generally remaining below target to keep the central bank on the sidelines at this meeting before resuming tightening at the October meeting.

Desjardins:

"This is a spectacular report. We are getting contributions from nearly all categories.

TD:

"Wow. There seems to be no stopping Canada of late"