HIGHLIGHTS OF THE WEEK – August 28

United States
• Economic data this week were supportive of the narrative of ongoing improvement in activity. Despite
a slight downward revision to estimated real GDP growth in the second quarter (1.1% from 1.2%), the
details showed an upward revision to consumer spending and business investment and a slightly larger
drawdown in inventories.
• Janet Yellen’s speech in Jackson Hole noted the improvement, saying at “in light of the continued solid
performance of the labor market and our outlook for economic activity and inflation, I believe the case for
an increase in the federal funds rate has strengthened in recent months.”
• With considerable uncertainty around the eventual neutral interest rate, the pace of future rate hikes will
be glacial and contingent on ongoing calm in global financial markets.

Canada
• As the unofficial end of summer draws near, analysts will have more and more Canadian economic data
from the second half of the year to dissect. That data is expected to confirm that the Canadian economy
bounces back from an abysmal second quarter.
• Corporate profits fell for the fourth consecutive quarter in the second quarter, foreshadowing next week’s
real GDP report. TD expects the Canadian economy shrunk 1.5%. June GDP is expected to be a silver
lining, with a 0.4% monthly increase setting the third quarter up for a rebound.
• Third quarter growth is also forecasted to get a one-time boost from enhanced Canadian Child Benefit
payments. Looking beyond the near term, external demand will be key, as consumer spending is constrained
and the housing market cools.

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
John.Maveety@td.com