TD/ Canada Trust Economic Highlights – Sept 10


United States

  • The European Central Bank announced yesterday that it will be cutting its policy rate by 10 basis points (bps), taking the refinancing and deposit rates down to 0.05% and -0.20%, respectively. In addition to the across the board rate cuts, ECB President Mario Draghi also announced two new programs for buying asset backed securities (ABS) and covered bonds issued by Eurozone banks.
  • The August reading of total non-farm employment disappointed even the most pessimistic forecast, com­ing in at 142k jobs – well below the consensus forecast of 230k. The unemployment rate ticked down 0.1 percentage points to 6.1%, as the participation rate fell back to its historical low of 62.8%.
  • Other economic data released this week was more encouraging, with both the ISM manufacturing and non-manufacturing indices surprising to the upside, while vehicle sales soared to 17.45M units. The U.S. trade deficit narrowed by a modest $264M in July to $40.6B, as strong exports (+0.9%) helped to outpace more modest import (+0.7%) growth.


  • Canada’s economy is blowing hot and cold these days. The August employment report was another ho-hum result, showing that labour market trends are far from inspiring.
  • On the plus side Canada’s exporters were running full steam in July. Canada’s trade surplus in goods is starting to look a little more established.
  • The Bank of Canada examined its tea leaves and decided the economy was unfolding as expected, and that it isn’t ready for a monetary policy shift just yet. The Bank is waiting for export strength to trigger busi­ness investment and stronger hiring. So far, there is little evidence of either, so the Bank can comfortably stand pat for a while yet.

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) 767-5442