TD/ Canada Trust Economic Highlights – October 3


United States
• Concerns over German banks and a surprise production cut announcement by OPEC provided some
volatility to financial markets this week.
• Economic data was mixed this week. Second quarter real GDP was revised up to 1.4% (from 1.1%), and
August goods exports beat expectations. This was offset by weaker-than-anticipated consumer spending
data for the month, which declined 0.1%.
• While the composition has shifted slightly toward foreign demand and away from domestic demand, the
economy continues to track real GDP growth close to 3.0% in the third quarter, enough for the Federal
Reserve to remain on course for a December rate hike. A key data point to watch on this front is next
week’s payroll report for September, where we expect a gain of 160k jobs – slower than earlier in the
recovery, but still consistent with ongoing labor market improvement.

• Canadian real GDP grew by 0.5% in July, following a 0.6% advance in June. A revival of oil production
played a key role, but the underlying details of the report were also strong, with broad-based expansion
of economic activity during the month.
• OPEC surprised markets this week by coming to an agreement to collectively cut oil production. Oil prices
rose on the news, but lack of detail on when and where the cuts will come from suggests that prices are
unlikely to gain much ground on a sustained basis.

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