TD/ Canada Trust Economic Highlights – June 7


United States
• The U.S. job machine slowed in May (+138k jobs) as the unemployment fell to a sixteen year low of 4.3%.
A pullback in the participation rate contributed to the fall in the unemployment rate.
• The Federal Reserve’s preferred measure of price growth slowed in April to 1.7% (from 1.9%), while the
core measure fell to 1.5% (from 1.6%).
• Weak inflation will probably not forestall a rate hike in June, but continued weakness could be enough to
delay further rate hikes. Just as much as job growth, this is an important metric to watch for guidance on
future Fed action.

• Canadian real GDP rose 3.7% annualized in Q1, while nominal GDP rose 8.3%, marking the best threequarter
streak in almost seven years.
• The household sector has contributed most to growth, due in large part to a hot housing market. Still,
exports appear to be gaining momentum heading into the second quarter of the year.
• Preliminary data showed policy-induced soft market conditions in the GTA and GVA extended into May,
bringing the durability of Canada’s growth prospects into question.
• Low interest rates will likely continue to support consumption amid a cool down in activity in Canada’s
largest housing markets, providing upside potential to our 2017 growth forecast. Higher interest rates in
2018 should bring about a cooling in consumption and real estate.

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