TD/Canada Trust Economic Highlights – Aug 5


United States

  • Equity markets sank this week, as concerns over Argentina’s debt default, Russian sanctions, and the timing and impact of fed rate hikes led to broad based sell offs.

  • Despite the somber mood in financial markets, the litany of economic data out this week was positive. Con­sumer confidence rose in July, GDP growth for the second quarter beat expectations (at 4.0% annualized growth), and consumer spending and manufacturing activity accelerated. To top it off, job growth came in at 209k, marking the sixth straight month above 200k and the strongest year-over-year performance since 2006.

  • The one bit of rain in the economic parade was the slow growth in wages, which suggests that the labor market, while improving, is still not operating at full speed. This is consistent with the Federal Reserve’s narrative around labor market slack and suggests that rate hikes are still a year or so away.


  • Canadian real GDP increased 0.4% in May, matching market expectations. The manufacturing (+0.8%), mining, oil and gas (+0.7%), wholesale trade (+1.2%) and retail trade (+0.5%) sectors all recorded sizeable gains. May’s reading brings tracking for 2014Q2 real GDP growth to around 2.5% (annualized).

  • The S&P/TSX held steady through the first half of this week, but fell by 2.3% over the past two days along­side a global equity rout.

  • The Canadian dollar fell below the 92 U.S. cent mark for the first time since early June this week. Falling oil prices and positive U.S. economic data contributed to the pullback.

  • The CFIB’s Small Business Barometer decreased for a second consecutive month in July, edging down 0.3 points and bringing the index to 63.2.

For further information, please contact:

John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446