Highlights of the Week – October 10
• Recent U.S. economic data has been distorted by hurricanes with the volatility likely to persist in the coming weeks. This theme came across this week, with auto sales, ISM indices, trade and payrolls all impacted.
• Auto sales surprised to the upside, as affected consumers begun to replace flood-damaged vehicles. Meanwhile, ISM indices surged, supported by slower supplier deliveries, with some reversal likely ahead.
• The jobs report surprised to the downside, with payrolls falling by 33k, but did include positive elements, such as a declining jobless rate and accelerating wage growth. These reinforced the likelihood of a rate hike by year-end.
• Signs that Canada’s economy is cooling increased this week with data on international trade that showed Canadian export volumes falling 1.9% in August, the third straight month of decline.
• Still, the Canadian job market keeps on chugging. The economy experienced its 10th straight month of job growth with 10k jobs added in September. Since the start of the year, the unemployment rate has fallen 0.7 percentage points and, at 6.2%, is at or close to its long-run structural rate.
• The question of how quickly the Canadian economy can grow is on the minds of monetary policymakers. In a
speech this week, Deputy Governor Leduc put his estimate for potential at 1.5%, the top end of the Bank of Canada’s range of 1.0% to 1.6%.
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