TD Canada Trust provides a weekly economic highlight report that we choose to share with our clients and those who follow us. This is an easy place to stay current on the broader economic conditions in Canada and the U.S. so that you are better informed to make stronger decisions around your own real estate investments. We are always available to answer any questions or walk through your real estate investment goals for now or in the future.
- It was a soft week for Canadian markets, partially reflecting a generally lackluster view on near-term economic prospects.
- This was confirmed in the data. Economic activity pulled back in February, setting the economy up for another soft quarterly expansion to start 2019.
- Early data for the second quarter also points to softness, with April auto sales falling month-on-month for the first time in three months alongside a weak PMI report. Growth acceleration still appears likely, but it now looks more like another sub-trend performance is in store.
- Apart from vehicle sales, recent data paint a positive narrative for consumer-related industries at the start of spring. Real consumer spending and pending home sales surged in March, while consumer confidence improved in April.
- Payrolls were up 263k in April, much better than expected; wage growth held steady at 3.2% y/y and the unemployment rate fell to a near-50 year low of 3.6%. A drop in the labor force participation rate assisted the latter.
- The Fed held rates steady this week, with an emphasis put on inflation running below target. But in the press conference, Fed Chair Powell noted that inflation was driven down by “transient” factors, adding that there is no strong case “for moving in either direction”. Indeed, for now, all of the tea leaves suggest that the Fed will remain on hold for some time.