TD/ Canada Trust Economic Highlights – August 9

Highlights of the Week – August 9

United States
• U.S. stock indices remained supported by the continued flow of favorable earnings releases. Bond yields and the U.S. dollar moved lower through Thursday but that dynamic reversed course with the robust payrolls report.
• The American economy continued to churn out jobs at a robust pace in July with payrolls rising by 209k. At the
same time, the unemployment rate fell to a cycle low of 4.3%. Average wages rose a solid 0.3% m/m.
• Improvements in ISM manufacturing and non-manufacturing prices sub-indices, together with a slightly firmer core PCE price index suggest that a turnaround in inflation may be underway.

• Whatever happens over the remainder of the year, 2017 will go down as a very good year for the Canadian economy. In July, the economy created 10.9k jobs and the unemployment rate fell to 6.3%, its lowest level since 2008.
• Even if economic growth is flat and no more jobs are created over the remainder of the year, real GDP will have
grown by 2.5% (annual average) in 2017 and the economy will have created 290k jobs – the highest in a decade.
• With household debt levels at record highs, interest rates going up and home prices looking to decelerate further, economic growth is likely to return to a less exciting pace around 1.5% to 2.0% in 2018. This is still close to a trend rate for an economy with an aging population and limited productivity growth.

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