In January, Canada’s “real” (i.e., inflation-adjusted) gross domestic product (GDP) increased 0.5% month-to-month, according to Statistics Canada, the same rate of gain as in December.

The back-to-back 0.5% gains in December and January brought the three-month moving average increase to 0.47%, a level only rarely bested over the longer-term history of the series.

The 0.5% gain month to month is a 6.2% annualized rate of increase, which is not likely sustainable. Expectations for the Canadian economy place 2011 real growth at 3.0% to 3.5%.

The manufacturing sector has picked up the pace. A return to better foreign trade has helped, despite the handicap of a Canadian dollar valued above par with the greenback.

Manufacturing’s January growth rate month to month was +2.8%, led by motor vehicles and associated parts and by fabricated metal products. Transportation and warehousing (+1.2%) also forged ahead, with a boost from pipeline shipments of natural gas destined for export.

The strong year-opening numbers for Canada are a pleasant plus and they reflect a perhaps even more important story: the resurgence in the U.S. economy.

It will be very good news for the world if, as appears to be happening, the U.S. becomes more firmly placed on a self-sustaining growth path. In March, America added 216,000 jobs. Since February 2010, the U.S. has recovered 1.5 million of the 8.4 million jobs lost in the recession.

More significantly, the month-to-month gain in employment in the U.S. has been near 100,000 or higher in six of the last seven months. The long-term average monthly gain is 100,000.

Similar to Canada, the U.S. manufacturing sector has been on a tear. The Purchasing Managers’ Index (PMI) of the Institute of Supply Management (ISM) was 61.2% in March.

A PMI above 42.5% indicates an expansion of the overall economy. However, manufacturing will not be expanding until the PMI rises above 50.0%.

The U.S. economy has been expanding for the past 22 months and manufacturing for the past 20 months. A PMI of 61.2% corresponds with real growth in the U.S. economy of 6.5%.

U.S. auto sales in March were a driver of the better overall economic results. Furthermore, there has been a sales shift to smaller cars as concerns increase about higher gasoline prices.

The PMI is made up of ten sub-indices, one of which is prices. Respondents are asked if the prices they are paying in the current month are higher or lower than in the previous month. This series recorded by the far the highest index value (85.0) among all the sub-indices, indicating widespread upward movement, regardless of what the consumer price index may be saying.

A host of commodity prices are moving upward. Silver is now at a 31-year high. Corn and wheat have firmed up. Political uncertainty in the Ivory Coast, where a defeated leader is refusing to step aside, has sent cocoa higher. But it is oil at US$108 per barrel that is of primary concern.

At Washington’s Georgetown University on March 31, President Obama addressed the issue of gasoline prices in a speach entitled, “Blueprint for a Secure Energy Future.” Only three years ago, the price of U.S. gasoline hit $4.00 per gallon. The current price is $3.60 per gallon.

It has been estimated that each increase of $10 per barrel in the world price of oil adds approximately 25 cents to the price per gallon at the pump. President Obama has set a goal of reducing America’s dependence on foreign oil by one-third over the next decade.

He also had the following to say about desirable sources of imported oil. “And when it comes to the oil we import from other nations, obviously we are going to look to neighbors like Canada, Mexico, steady and stable and Brazil, which recently discovered significant new oil reserves.”

The harsh light of reality, as exposed by supply disruptions and political uncertainty in the Arab world indicates a softening in at least one Democrat’s stand on Alberta’s Oil Sands output. All forms of energy require a juggling of trade-offs over environmental and political issues.

The President goes on to stress that cutting U.S. oil dependence depends on two things: finding and producing more oil at home and expanding production of cleaner alternative fuels.

First among the latter is natural gas, especially from shale deposits. This may require more advances in technology to guard against polluting water supplies. Mr. Obama is also bullish on renewable biofuels. He makes the point that more than half of Brazil’s vehicles run on such sources.