TD/ Canada Trust Economic Highlights – Mar. 9


United States

  • The U.S. job machine keeps on chugging, creating 295k jobs in February. Job growth was widespread with strength in goods and services, and even some help from state and local governments. The only fly in the ointment was a relatively weak pace of wage growth, which decelerated to 2.0% on a year-ago basis (from 2.2% in January).
  • The unemployment rate fell 0.2 percentage points to 5.5% – its lowest level since June 2008. The last time the unemployment rate was this low the fed funds rate was 2.0%, but going in a different direction.
  • Conditions in the labor market augur for a higher fed funds rate, but the Fed will only bring it there when they are convinced inflation is moving toward their target.


  • Canadian real GDP advanced 2.4% (annualized) in 2014Q4, decelerating from the 3.2% increase in Q3. The details of the report were soft. Investment in non-residential construction (-1.8%) and machinery and equipment (-3.2%) fell. Net exports were also a drag, reflecting a 1.6% drop in energy exports. Inventories (+1.8 points) made a notable contribution to growth.
  • The Bank of Canada held firm on Wednesday, keeping the overnight interest rate at 0.75%. With the January rate cut telegraphed as an insurance policy on the expected soft patch in growth and core infla­tion forecast to remain near the 2% target, we expect the Bank to remain on hold through to the end of next year.
  • Canada’s trade deficit came in at $2.5 billion in January, the largest deficit since July 2012. Exports fell 2.8%, led by a 14.7% decline in energy products on account of lower prices. Imports were essentially flat for the month.

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) 767-5442