TD / Canada Trust Economic Highlights – Feb 18


United States

  • After picking up steam in the second half of 2013, economic momentum has decelerated decisively in the first quarter of 2014. Severe winter weather is at least partially to blame. Unseasonably cold weather and downward revisions to data suggest that economic growth in the first quarter of 2014 will come in under 2%, while the fourth quarter estimate will likely be revised down from 3.2% to mid-2%.
  • Lackluster January’s retail sales and industrial production reports out this week were the latest additions in the streak of weather-related disappointments.
  • While economic performance at the start of the year has been uneven, the good news is that the weak­ness is not expected to last. The strength in the economic fundamentals is still intact. Moreover, Congress’ extension of the debt ceiling through to March 2015 removes a significant source of political uncertainty.


  • Canadian manufacturing sales declined 0.9% in December, coming in well below market expectations for a flat reading. The December pullback comes off the heels of three consecutive monthly gains. In real terms, sales were down 1.9%.
  • Housing starts fell to 180,248 annualized units in January, down from 187,144 in the prior month. On a six-month moving average, starts are running a robust 191,456. Existing home sales declined for the 5th consecutive month January (-3.3%). Sales have now down by 9.1% since last August.
  • Meanwhile, home prices posted yet another record. The average existing price rose 0.3% to $400,000 – on a year-over-year basis, prices are up by 9.5%. The Teranet Home Price Index (HPI) gained 0.4% on the month in January (market consensus: 0.0%) and 4.5% on a year-over-year basis, an acceleration from December (+0.1% M/M and +3.8% Y/Y).

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