HIGHLIGHTS OF THE WEEK – May 17th
• Retail sales rose a robust 1.3% in April. Spending was lifted by rebounding auto sales and higher gasoline prices, but core sales also performed well, up 0.6% on the month.
• First-quarter growth was likely not as bad as originally anticipated and appears to have averaged closer to 1.0% than the original 0.5% estimate. Growth is tracking above 2.0% for the second quarter, suggesting the American economy will bounce back from yet another early-year slowdown.
• Consumer spending should continue to be supported by rising wage growth, which is now showing up in a broad range of indicators. Given the rise in saving recorded over the past several months, households are in good position to loosen their purse strings.
• Encouraging signs were seen in Alberta this week, as wildfires moved away from developed areas. The process has already begun to bring oil and gas production back online at a number of major facilities.
• Despite the good news, the wildfire damage and disruptions are adding to what was already a difficult economic situation in Alberta. Data this week confirmed the magnitude of the challenge, revealing that Alberta’s economy had already contracted 4% in 2015.
• The growth outlook remains challenged by a continued pullback in business investment. Mining and oil and gas businesses intend to reduce capital and maintenance spending by a further 23% this year, following a 31% decline in 2015. Reductions are also planned among manufacturers, underscoring the challenges involved in the economic rotation back towards manufacturing and exports.
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