TD/ Canada Trust Economic Highlights – Dec 30


United States

• The U.S. economy had a bumpy ride in 2015. A harsh winter as well as the tug of war between strong domestic
fundamentals and weak external demand led to uneven performance, keeping headline growth pinned close
to 2% this year.
• The good news is that domestic demand continues to show vigor, with spending by households and businessesadvancing at a 3% pace. Moreover, the painful adjustment in the energy and export sectors appear
to be largely in the rearview mirror, clearing the way for faster and steadier growth in 2016.
• The Fed has embarked on a path of policy normalization, but it will be a gradual process with monetary policy
expected to remain accommodative for some time still. As such, it should not hamper consumer spending
nor derail the housing recovery.


• 2015 was an eventful year for Canada. Oil plunged, the loonie nosedived, governments changed and the
Bank of Canada cut rates twice to support a flagging economy. The collapse in oil prices, from an average of
$93/bbl in 2014 to $49/bbl in 2015, tipped Canada into recession as investment in the oil patch was slashed.
• Looking ahead, 2016 is bound to be better. Low oil prices will continue to be a challenge for Canada’s oil
patch, but the direct impact of the downturn on GDP will fade. Moreover, stronger growth of our biggest trading
partner should lift exports, helped by a weaker loonie.
• Overall growth is expected to pick up from 1.2% in 2015 to 1.7% in 2016, as outlined in our recent Quarterly
Economic Forecast. Still, the pace will be relatively tepid, and should see the Bank of Canada keep interest
rates low for quite some time.

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