TD/Canada Trust Economic Highlights – May 13


United States

  • U.S. trade data surprised to the downside with the deficit narrowing by a paltry $1.5 billion and landing at $40.4 billion. The details of the report were relatively constructive, with exports rising by 2.1 m/m, outpac­ing the 1.1% m/m gain in imports.

  • On Wednesday, FOMC Chair Janet Yellen delivered her first testimony to the Joint Economic Committee. In her pre-written remarks, Yellen remained relatively optimistic about near-term growth prospects, while attributing much of the recent slowdown in economic activity to be weather related.

  • Towards the end of her testimony, Yellen noticeably departed from the upbeat economic outlook, and cited a more protracted slowdown in housing to be one of the most prominent downside risks to the FOMC’s baseline projections.


  • It’s difficult to put a positive spin on Canada’s employment report in April. Job losses were matched by a decline in the labour force to keep the unemployment rate unchanged at 6.9%. The Canadian dollar gave back Thursday’s gain on the report.

  • Looking ahead, we continue to expect the acceleration in the U.S. economy to drive stronger growth in Canadian exports and eventually business investment. This translates into faster growth in the goods sectors of the economy, while services remain more modest.

  • However, given the relatively smaller size of the goods sectors of the economy, overall hiring in Canada could remain on the more modest sideover the next two years. And, as was the case in April, it will likely continue to underperform our accelerating neighbor to the south.

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

[email protected]