TD/ Canada Trust Economic Highlights – May 12


United States

• Since mid-March, the price of crude oil has rallied by more than 35% with the WTI benchmark sitting at $59.4 at the time of writing. This has led to a recalibration of inflation expectations, which has resulted in an abrupt selloff in global fixed income markets over the past two weeks.

• The U.S. trade deficit widened by its largest margin on record in March, as imports recorded a sizeable 7.7% m/m gain, while exports rose by just 0.9% m/m. Port disruptions had a heavy hand in the skewed import numbers, but the weak print alongside the dissapointing March wholesale inventories will to lead to an outright contraction in Q1 real GDP.

• The U.S. economy created 223k jobs in April, a touch below the consensus reading of 228k, but a good number nonetheless.The unemployment also edged lower by 0.1 percentage points, falling to 5.4%.


• WTI topped US$60 per barrel this week for the first time since December 2014, as stronger global demand combined with U.S. production declines increased optimism in oil markets.

• However, energy equity prices went into retreat on the week, pulled lower by concerns about the impact of the newly elected NDP government on Alberta’s energy sector. This concern comes at a time when employment in the Alberta resource sector continued to contract, albeit not enough to derail overall job gains in the province in April.

• In Canada as a whole, we believe the 20K decline in April employment is a harbinger of labour market weakness to come. Indeed, as economic activity is expected to pick up steam in Q2, the weakness in Q1 real GDP growth is forecast to weigh on employment growth in the current quarter.

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